Tax-Free Money-Market Funds Shine

The best rated open-end bond funds in May were tax-free money market funds paying out a consistent stream of income. Four municipal funds also made the top-10 list.

With stocks flirting near bear-market territory, off as much as 20% for the Dow Jones Industrial Average since October, investors may be seeking the relative safety of the bond market.

Unfortunately, the weak economy and inflationary environment has firms such as Lehman Brothers(LEH Quote), Bank of America(BAC Quote) and Barclays Capital(BCS Quote) predicting another corporate bond slump warning investors to pare their holdings.

The best rated open-end bond fund this month is the Evergreen Institutional U.S. Government Money Market Fund(EGNXX Quote), rated A+. ...