Just been looking into municipal bonds and honestly they're kind of interesting if you want stable income without getting hammered by taxes. So I found these three funds that seem to be the best municipal bonds to invest in right now, and they've all got solid track records.

First up is Colorado Bondshares (HICOX). This one's pretty straightforward - it basically puts everything into Colorado municipal bonds and tax-exempt securities. The five-year returns are around 4.4%, which is decent. As of late 2024, about 30% of their holdings were in miscellaneous bonds. If you're specifically looking at what are the best municipal bonds to invest in within a single state, this could work if you're in or near Colorado.

Then there's Vanguard's Limited Term Tax-exempt Fund (VMLTX). They're more conservative here - focusing on top-rated municipal bonds and keeping the average maturity around 2-6 years. The five-year annualized return sits at 2.6% with an expense ratio of just 0.17%, which is pretty low. This feels like the safer play if you want best municipal bonds to invest in but don't want a ton of volatility.

Last one I looked at was Invesco's Limited Term Municipal Income Fund (AITFX). Similar strategy to Vanguard but with a five-year return of 2.4%. They also keep maturity short, targeting five years or less. Jack Connelly's been running this since 2016, so there's some stability there.

The thing about these funds is they all offer tax-free income, which is huge if you're in a higher tax bracket. Not sure which one fits best for different situations though - the Vanguard seems like the most conservative option if you're trying to find the best municipal bonds to invest in for steady returns. Anyone else holding any of these?