Muni Etf

Muni bonds are exempt from federal tax. They are not exempt from capital gains from federal taxes. You still pay state taxes of the city / Armed unless you buy from your state of residence and the state also allows a tax deduction.

Regarding the part of the ETF for your reply, I do not think there Muni bond ETFs at this time.

Mini consider bond mutual funds:
http://www.fasttrack.net/family.asp?fam = ...

No, I do not think so. Nothing is free of tax.