Friday Fixed Income – Focus On Municipals

Three closed-end municipal bond funds with attractive pricing and yields.

music selection: “The Wanton Song” — Led Zeppelin.

Each Friday, I cover a topic somehow related to fixed income, debt investing, preferreds or similar instruments. I personally keep a 40% allocation to income investments in early retirement. By strategically selecting income investments, I am able to cover 120% of my annual budget with just this 40% allocation. The rest is available to do the heavy lifting of overcoming inflation in a long retirement.

This Friday, I am sharing three closed-end funds that are invested entirely in investment grade municipal bonds. They have been chosen for being attractively priced and yield rich. These funds are federal tax exempt. They also represent an enormously safe way to invest while handily outpacing the typical earnings on cash and near cash investments.

BlackRock Muni Enhanced (MEN) is a closed-end fund that seeks current income exempt from regular Federal income tax through investment in investment grade municipal bonds. I pay an Income Only distribution on a monthly basis.

  • Discount to NAV – 12.46%
  • Yield – 5.85%
  • Effective leverage – 40.34%
  • Expense ratio – 2.05%
  • Learn more

Invesco Advantage Municipal Income Trust 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 – 12.48%
  • Yield – 5.94%
  • Effective leverage – 41.63%
  • Expense ratio – 2.21%
  • Learn more

Invesco Municipal Opportunity Trust (VMO) is a closed-end fund that seeks current income exempt from Federal income tax through investment in investment grade municipal bonds and inverse floating rate obligations. It pays an Income Only distribution on a monthly basis.

  • Discount to NAV – 12.44%
  • Yield – 5.98%
  • Effective leverage – 41.57%
  • Expense ratio – 2.18%
  • Learn more
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Adam Reynolds 5 months ago Member's comment

Good song.