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RN, Loki and Gordon, thanks for your responses and the link to the FAQs. I'll spend some time trying to digest the post. In the meantime:

I guess you're talking about a tax exempt muni fund, given that you said the income is tax free. If you want to invest in a muni bond fund, take a look at Vanguard.

Yes. It's a Franklin Templeton CT Municipal bond fund. And yes, it does have a front end charge depending on the amount invested.

I looked at the Vanguard site and though they do have tax exempt bond funds, they don't have one for CT. My layman look at state tax rates suggests CT is not particularly high or low.

In general, if you are in the 28% tax bracket or under, you should be able to beat muni bonds with other fixed-income options, except for high tax states with state specific munis

We are in the 28 % tax bracket. So I guess we should be looking at other fixed income options as well.

Just a big picture observation: I assumed the whole point of bonds was to avoid the risk of losing principle and to give you a fairly certain idea of the yield. I guess bond funds do not really provide this level of certainty.

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