The high yield muni market in general has etf forex reviews a stellar performer following the trough of the 2009 financial collapse but there are some striations depending on just which municipalities are covered in a particular holding. Many view California as being on the risk of declaring bankruptcy for instance, while much of the midwest remains relatively unscathed by the economic malaise. PMF has been paying a steady dividend for years now with no prior reductions even during the economic crisis.
This steady monthly payout is a nice predictable income stream in the absence of a new financial nightmare. PMF slightly underperformed the rebound in 2009, the underlying share price is up nicely on the year, indicating further confidence in the fund’s ability to return steady dividend payments to investors. There remains risk of share price decline or a cut in the dividend stream of course. It is likely that a dividend cut would be priced in and shares would start to decline in advance. It is also worthwhile that this ETF is best held in a taxable account to avoid tax liability complexities since it is already tax-exempt and a high yield tax-advantaged account would be better suited for investments that don’t already offer such tax protection.
Disclosure: I’ve been long PMF since early 2009 when initially highlighted as a Top High Yield Muni ETF. That ETF’s beta is a little too risky for me. Much lower yield of course, but also much steadier return. This is a closed ended fund, but then again, editors of Financial Web sites probably have a hard time figuring out the difference! Which is why they are providing investment recommendations!
Too much going on in state and local municipalities. Markets are going to continue to punish bad behavior in my opinion. It was good while it lasted but I’ve since unloaded all muni instruments. How Should One Handle an Exit Interview?
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