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Tax free bond fund

A little over 3 years ago I started buying FTABX I have been putting money into it a few times a year. It pays me $100.00 a month but the fund is down 5%, I don't think I have ever seen it to be on the plus side is this normal or should I sell it and move it so thing else?
In my Brokerage account I have reduced my tax free ETF funds in favor of individual bonds issued by my home state.  These short to medium term bonds have less interest rate risk and produce tax free dividends as my state sports a pretty high state income tax which is likely to get worse with the Democrats winning over both the legislative and executive branches.  They are already talking instituting local option sales tax even before being sworn in. 
Rising rates kill bond funds. Corny has the right idea, laddering individual bonds is smart in a rising rate environment. The question is when do rates stop rising so you can lock in higher rates for when they go the other way.
I agree with MrRichLife.  If rates continue climbing your bond fund will continue to decline.  No fun!  Buying individual bonds (or CDs) will protect you from that decline.  The yields for government treasuries aren't bad either. 
According to Fidelty's page for FTABX, over the past three years (through Dec 4th), the fund has provided a total return of 2.30%/year. Since you've been drawing out 3%/year in interest dividends (and perhaps around 1/2% per year in cap gains dividends), its hardly surprising that the NAV is down around 4% over three years. (11.63 on Dec 3, 2018, 11.19 on Dec 3, 2020 amounts to a 3.8% drop).

You've been drawing out money faster than the fund has been earning it. But the returns have been significantly positive.

The fund has an average duration (and maturity) of about seven years. Had you bought a single seven year bond three years ago, and waited another four years until it matured (to be certain that you weren't selling it at a below-par price), you'd probably have gotten a little more from the bond fund than from the bond.
I am not so sure about the out performance of a bond fund versus an individual bond as shown in the case study. In reality an investor should have a ladder of bonds maturing regularly and reinvested into higher or stable rates (or as recently shown, declining rates) which mitigate/duplicate what they are illustrating in the study as the advantage of a bond fund. The advantage of individual bonds are greater precision and predictable along with your own desired tax outcomes. I know when and how much with a bond or bond ladder and how it will alter my taxes. With a fund, a lot of that is out of my control.

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