Making Cents: Tax-Exempt Bond Funds Out of Favor

Tax-exempt bond mutual funds have been shrinking for three years--because of dull returns, because government borrowing has fallen and because buying stocks has its own tax advantages, particularly because there are no taxes at all if the stocks aren’t sold. This year, the number of tax-exempt funds has shrunk by 105, single-state funds by 14. Fund managers are handling more funds each--and a few are getting pink slips.