NEW YORK ( TheStreet Ratings) -- Municipal bonds are a popular investment among retirees and high net-worth individuals seeking tax-free investment income. Depending on one's tax bracket, municipal bonds may be arithmetically superior to U.S. Treasury bonds, corporate bonds or mortgage-back securities.

Assuming an investor is comfortable with the credit risk of a municipal bond or bond fund , the question of whether or not to buy municipal bonds can be solved with a simple formula.

Often, the fullest tax benefits of municipal bonds are achieved when an investor purchases bonds in the state in which he or she resides; potentially freeing the investor of federal and state tax burdens. Today, we will be focusing on New York municipal bond funds.

The following New York municipal bond funds are rated highest by TheStreet Ratings. TheStreet Ratings condenses the available fund performance and risk data into a single composite opinion of each fund's risk-adjusted performance. While there is no guarantee of future performance, these investment ratings provide a solid framework for making investment decisions as we enter 2012.

-----------------------------

Dreyfus New York AMT-Free Municipal Bond Fund

Dreyfus New York AMT-Free Municipal Bond Fund ( DNYIX) is managed by Thomas Casey and David Belton. The fund pays dividends on a monthly schedule.

Expense Ratio: 0.67%

Load: None

Minimum Initial Investment: $1,000

30-Day Yield: 4.00%

Rated "A+ (Buy)" by TheStreet Ratings

-----------------------------

AllianceBernstein Muni Income Fund New York Portfolio

AllianceBernstein Muni Income Fund New York Portfolio ( ALNYX) is managed by Michael G. Brooks, Fred S. Cohen, R.B. Davidson III, Terrance T. Hults and Wayne Godlin.

Expense Ratio: 0.86%

Load: 3.00%

Minimum Initial Investment: $2,500

30-Day Yield: 3.83%

Rated "B+ (Buy)" by TheStreet Ratings

-----------------------------

Dreyfus New York Tax Exempt Bond Fund

Dreyfus New York Tax Exempt Bond Fund ( DRNYX) is managed by Thomas Casey and David Belton. This fund pays dividends monthly.

Expense Ratio: 0.74%

Load: NONE

Minimum Initial Investment: $2,500

30-Day Yield: 3.90%

Rated "A- (Buy)" by TheStreet Ratings

-----------------------------

BlackRock NY Municipal Bond Fund

BlackRock NY Municipal Bond Fund ( MANKX) is managed by Timothy Browse and Ken Jacob. This fund is intended for institutional investors.

Expense Ratio: 0.74%

Load: NONE

Minimum Initial Investment: $2,000,000

30-Day Yield: 4.67%

Rated "A (Buy)" by TheStreet Ratings

-----------------------------

Nuveen New York Municipal Bond Fund

Nuveen New York Municipal Bond Fund ( NNYAX) is managed by Scott Romans Ph.D. This fund pays dividends monthly.

Expense Ratio: 0.81%

Load: 4.20%

Minimum Initial Investment: $3,000

30-Day Yield: 4.21%

Rated "B+ (Buy)" by TheStreet Ratings

-----------------------------

Putnam NY Tax Exempt Income

Putnam NY Tax Exempt Income ( PNYYX) is managed by Thalia Meehan, Paul Drury and Susan McCormack. This fund pays dividends monthly.

Expense Ratio: 0.53%

Load: NONE

Minimum Initial Investment: $500

30-Day Yield: 4.37%

Rated "A- (Buy)" by TheStreet Ratings

-----------------------------

T. Rowe Price NY Tax-Free Bond

T. Rowe Price NY Tax-Free Bond ( PRNYX) is managed by Konstantine B. Mallas.

Expense Ratio: 0.51%

Load: NONE

Minimum Initial Investment: $2,500

30-Day Yield: 4.02%

Rated "A+ (Buy)" by TheStreet Ratings

-----------------------------

Vanguard NY Long-Term Tax-Exempt

Vanguard NY Long-Term Tax-Exempt ( VNYTX) is managed by Michael G. Kobs. The fund distributes dividends monthly.

Expense Ratio: 0.20%

Load: NONE

Minimum Initial Investment: $3,000

30-Day Yield: 3.74%

Rated "A- (Buy)" by TheStreet Ratings

-- Written by a member of TheStreet Ratings Staff. You can find additional 2012 mutual fund ratings here.

TOOLS AND IDEAS FOR INCOME INVESTORS:





If you liked this article you might like