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Friday Fixed Income

Three municipal bond funds.

music selection:  “Bringin’ On The Heartbreak” — Def Leppard

Friday is the time for Fixed Income investments at the raptor.  About once a quarter, I like to highlight three possibilities in the closed end fund space that feature federal tax exempt municipal bonds.  This is arguably the safest income investment category out there.  And yields are often over 5%.  I would expect most raptors in the accumulation phase to be in the 22% tax bracket (US).  So the effective yield for most readers is actually over 6.1%.  Not too shabby.

Invesco Advantage Municipal Income II (VKI) is a closed end fund that seeks  high current income exempt from Federal income tax with capital preservation through investment in investment grade municipal securities.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 9.14%
  • Yield – 5.81%
  • Effective leverage – 42.84%
  • Expense ratio – 2.21%
  • Learn more

BlackRock Long Term Municipal Advantage (BTA) is a closed end fund that seeks current income exempt from regular Federal income tax through investment in long term investment grade municipal securities.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 9.49%
  • Yield – 5.83%
  • Effective leverage – 39.53%
  • Expense ratio – 2.32%
  • Learn more

BlackRock Muni Yield Investment Fund (MYF) is a closed end fund that seeks current income exempt from regular Federal income tax through investment in investment grade municipal bonds.  It pays an income only distribution on a monthly basis.

  • Discount to NAV – 4.46%
  • Yield – 6.09%
  • Effective leverage – 41.45%
  • Expense ratio – 1.57%
  • Learn more

Devour your prey raptors!

{ 3 comments… add one }
  • kimobear July 17, 2018, 3:03 am

    Have you ever considered SDY, low expense ratio and yield of 2.45% ?

    • The Lizard King July 17, 2018, 2:41 pm

      I’m not familiar with it. I focus on the high yield names for current income and not growth potential. I’m primarily looking to cover my sequence of returns risk.

  • kimobear July 19, 2018, 3:05 am

    Understand, I use it to generate some income while at the same time dampen the volatility. Consists of stocks that have paid dividends consistently over the last 20 years. My alternative to some close end funds for part of my portfolio.
    Right now don’t feel really comfortable with bonds with raising interest rates.

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