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Old 10-20-2019, 07:16 PM   #21
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Originally Posted by COcheesehead View Post
The closed end fund is PMF. I am not recommending it. Itís not for the faint of heart. It uses leverage and derivatives, but itís 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.
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Old 10-20-2019, 07:24 PM   #22
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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.
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Old 10-20-2019, 08:58 PM   #23
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Aren't they then effectively buying the issues that you have rejected?


Possibly, but Iím buying a few shares per month vs making a large purchase of an individual bond. Iíd need to go out over 10 yrs to match the yield offered by the fund
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Old 10-20-2019, 10:29 PM   #24
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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).
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