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Tax-Free Yields And Capital Gains With Single State Municipal Bond CEFs

Published Wed, 21 Aug 2019 02:30:00 -0400 on Seeking Alpha

Nuveen is the most prolific closed-end fund issuer, with 74 CEFs across various asset classes. This is in part thanks to the 26 single-state municipal bond CEFs, which combined have $8.7 billion in AUM among them. These are in addition to the 16 national muni funds with $17.8 billion in AUM.
The combined amount of capital Nuveen has to invest in muni markets is important, because municipal bonds are not like stocks sold on an exchange. Market access is important when investing in muni bond issuances, not unlike a stock IPO; when a municipality issues a bond, their broker or underwriter will try to offload as many bonds as quickly as possible, which means the best bonds will be reserved for the largest buyers—resulting in a few undesirable scraps being available for retail investors, even large retail investors with 8 digit portfolios.
This is why I always urge investors to buy muni bond funds over issuances: you’ll get better quality issues as well as greater liquidity (many muni bonds will trade once every few months or not at all), a more diversified portfolio, and the expertise of a manager choosing the best bonds for you.
Unlike stocks, muni bonds are a market where active management easily beats passive.
The data bears this out in no uncertain terms. CEF Insider data shows that the average annualized total return for muni bond CEFs is 7.1% over the last decade, far above the iShares National Municipal Bond ETF (MUB)’s 4% annualized return over the same... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III 10.93   0.0 0.00 0.00 4.45
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND 13.16   0.0 0.00 0.00 3.98

PIMCO CALIFORNIA MUNICIPAL INCOME FUND III - PZC
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III - PZC  


Older articles featuring Pimco California Municipal Income Fund Iii (PZC):
Weekly Review: Municipal Bond CEFs - Dividend Cut For Most Of PIMCO Funds
PCQ: Don't Pull A Muscle While Stretching For Yield
Weekly Review: Municipal Bond CEFs - PCQ Announced Unchanged Dividend
Weekly Review: Municipal Bond CEFs - Dividend Cuts For Several PIMCO Funds
Yield Hunter CEF Report April 2019: Distribution Cuts Finally Plague PIMCO
Dealing With A Dividend Cut In Your CEF Portfolio
Weekly Fund Wrap: Monday Night Dividend Massacre
Paying Heed To Dividend Sustainability: CEF Weekly Update
PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC and PYN Declare Monthly Common Share Income Dividends
PMF, PCQ, PNF, PML, PCK, PNI, PMX, PZC, and PYN Declare Monthly Common Share Income Dividends

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