Your assumption about the yield you’d get in a bond fund is wrong, aside from the tax issue.
The safe short-term bonds pay close to nothing, and the longer bonds could default.
Some of the return on this fund is simply the result of rates falling, making older bonds more attractive. But market interest rates can’t go down much further, short term rates are already 0.0 and 5-year rates below 1%.
The fund you linked to includes local bonds, and there have been a number of local defaults in the state lately. That doesn’t mean it is a bad investment, but you would only come out ahead by taking on this risk.
