With the economy so much up in the air, Touchstone is getting aggressive with its tax tax-free intermediate term funds. The firm argues that investors can reduce risk and enhance returns for their portfolios with such an offering.

"We have seen a strong flight to quality in the marketplace. From a historical perspective, municipals are very attractively priced compared to treasury bonds, and yet they deliver nearly equivalent yields," said John Goetz, portfolio manager for the Touchstone Tax-Free Intermediate Term Fund.

For Goetz, intermediate term makes more sense than short- or long-term. "One of the things that makes the intermediate sector attractive right now is that the yield curve is very steep. The difference between maturities across the yield curve is very wide, because short-term interest rates are still dropping," he added.

"There are always benefits to owning a municipal bond fund. They are a great way to reduce volatility, provide stability and anchor your overall investment portfolio," the manager contended. 

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