These municipal bond closed end funds are typically:
- They are part of leveraged funds
- They have tax free high yield compare to mutual funds
- They have higher risks due to interest rate risk
- Nuveen Select Quality Municipal (NQS)
- Nuveen Muni High Income Opportunity (NMZ)
- Nuveen Dividend Advantage 3 (NZF)
- Nuveen Municipal High Income Opportunity 2 (NMD)
- Nuveen Dividend Advantage 2 (NXZ)
The investment objective of Nuveen Select Quality Municipal fund is to provide current income exempt from federal income tax rate. This muni bond CEF invests most of assets in a diversified portfolio of tax free investment grade municipal bonds. The fund manager is Thomas C. Spalding Jr.
This top municipal bond fund has a distribution rate of 6.56%. Based on 35% federal tax rate, the taxable equivalent yield is 10.1%. The expense ratio is 1.53%. It also has $784 million of total net assets. The effective leverage is 37%.
It has a 5 year annualized return of 6.91%. Morningstar has ranked this closed end fund with 4 stars. As of March 2012, the average duration is 14.28 years and the average maturity is 19.84 years. Its annual portfolio turnover rate is 13%. The top 5 sectors in its portfolio are health care (21.13%), limited tax obligation (17.98%), general tax obligation (13.27%), transportation (12.3%), and US Guaranteed (6.89%).
2. Nuveen Municipal High Income Opportunity (NMZ)
This Nuveen Municipal High Income Opportunity fund uses its assets to purchase a portfolio of investment grade municipal bonds and non-investment grade municipal bonds. John Miller is the fund manager since 2003. As of May 28, 2012, this best muni bond fund is trading 4.34% premium to NAV.
The total nets assets are $462 million. This municipal bond CEF has returned 17.80% over the past 3 year, and 3.09% over the past 5 year. The average coupon is 7.68%. It has 274 holdings in its assets.
3. Nuveen Dividend Advantage 3 (NZF)
Nuveen Dividend Advantage 3 fund has a distribution rate of 6.44%. This yield is distributed monthly. The total expense ratio is 1.50% per year. Its total net assets are $861 million. The total leverage ratio is 35.41%. This top fund is managed by Paul Brennan.
This tax free municipal bond fund is ranked with 4 stars rating by Morningstar. The fund has a 5 year average return of 6.66%.
Disclosure: No Position
Fund Performance
- Nuveen Select Quality Muni (NQS) - 37.08%
- Nuveen Muni High Inc Opp (NMZ) - 39.90%
- Nuveen Dividend Advantage 3 (NZF) - 35.42%
- Nuveen Muni High Inc Opp 2 (NMD) - 34.24%
- Nuveen Dividend Advantage 2 (NXZ) - 32.54%
- Nuveen Investment Quality Muni (NQM) - 35.90%
- Nuveen Municipal Advantage (NMA) - 35.24%
- Nuveen Premium Income Muni 2 (NPM) - 37.11%
- Nuveen Premier Muni Income (NPF) - 36.83%
- Nuveen Premium Income Muni (NPI) - 36.23%
- Nuveen Premium Income Muni 4 (NPT) - 36.07%
- Nuveen Quality Municipal Fund (NQI) - 37.29%
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