Muni Bond Funds That Work for You

(VWITX Quote - Cramer on VWITX - Stock Picks)Vanguard's Intermediate-Term Tax-Exempt (VWITX) fund has lower expenses than the vast majority of its peers. And those super-low fees give the fund a performance advantage that's hard to beat. This fund's returns over the last year or so have suffered because of airline-connected investments. The fund hasn't lost money, but it has badly trailed similar funds over the past 12 months. Nevertheless, its long-term record is still solid.

Like Vanguard, Fidelity offers a whole array of tax-exempt bond funds. The fund company runs funds specific to states like California, Florida and Arizona, and manages national funds as well. The (FLTMX Quote - Cramer on FLTMX - Stock Picks)Fidelity Spartan Intermediate Municipal Income (FLTMX) fund is one of them. This fund focuses on higher-quality muni bonds and also sports low expenses. The only major drawback: You have to cough up $10,000 to get in.

T. Rowe Price is another key stop to make if you're shopping for a tax-exempt bond fund. The fund company has all the right attributes: lots of offerings sporting solid records and low costs. And if you want a fund that invests in both stocks and municipal bonds, T. Rowe has that too. Its (PRTEX Quote - Cramer on PRTEX - Stock Picks)Tax-Efficient Balanced (PRTEX) fund has half its money in stocks and the other half in tax-exempt bonds. It's a good choice if you only want to buy one fund.

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