MuniBond Funds now?

[Henry Lili]

Quote:

Originally Posted by COcheesehead The closed end fund is PMF. I am not recommending it. It’s not for the faint of heart. It uses leverage and derivatives, but it’s yield is 4.7%.

PMF is trading at a huge premium to NAV. You'd be paying +13% above the value of the underlying bonds, which are likely also above par, not the best time to buy IMHO.

[COcheesehead]

Quote:

Originally Posted by Henry Lili PMF is trading at a huge premium to NAV. You'd be paying +13% above the value of the underlying bonds, which are likely also above par, not the best time to buy IMHO.

I don’t recommend it. It uses leverage and derivatives. It’s high risk. It yields 4.7% tax free.

[jazz4cash]

Quote:

Originally Posted by OldShooter Aren't they then effectively buying the issues that you have rejected?

Possibly, but I’m buying a few shares per month vs making a large purchase of an individual bond. I’d need to go out over 10 yrs to match the yield offered by the fund

[RobLJ]

I bought 2 Closed End muni funds almost 6 years ago, EOT and PMM, but they were at a discount. Turned out well, since they're up about 6%/year; I reinvested dividends until last year. But they are at a premium, so I wouldn't buy them now.

This guy covers muni and other ClosedEnd funds on Seeking Alpha and has some useful data.
https://seekingalpha.com/insight/cef...ial-trade-deal

I'll take another withdrawal from the 403b in January and usually invest half in muni CEFs, but most are pricey now. It's nice not having to pay taxes on the divvies, though.
Note: as CO warns above about PMF, these also use leverage and therefore are quite volatile. I would only consider them if you plan on just pulling the distributions or are willing to hold 5-10 years, like stocks. When I bought, I was getting ready to pull distributions in the brokerage fund this year and onward, since my online part-time gig probably ends next year. I pulled divies from the brokerage funds this year to pay for the solar panels that I just had installed, as well as spending half of my 403b withdrawal for the year (the rest went in the brokerage fund to generate future income).