I have invested in Vanguard VCAIX for years and it has been consistent tax free 3.5%+ return. It is about 10% of liquid assets. The higher your tax bracket the more competitive it is with non-tax free investments. The fund has a large pool of bonds so any individual default (like Stockton or San Bernadino) doesn’t have much effect. The fund only buys intermediate term and holds to maturity so the bonds are redeemed at PAR so interest rate fluctuation isn’t a big problem. The Vanguard fund outperforms Fidelity and Schwab doesn’t even offer a product. If you are on Social Security the double tax-free income is actually considered income and renders some of the social security benefit from tax free to taxable. There is thus a tax implication for some investors. This is true for all investments though.
Vanguard also has low overhead!
