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The Case For High-Yield Municipal Bond Funds

FYI: (Click On Article At Top Of Google Search)

High-yield muni funds have long average maturities, and thus are subject to interest-rate risk—but they don't correlate with Treasuries as much .


  • edited April 2017
    Has been a bit of a stealth bull as this sector is beating all the taxable bond sectors YTD except emerging markets and preferred. In my 5 bond portfolio had swapped out of FCFAX into PYMDX. Unfortunately not a huge position yet. @SlowLane was two steps ahead of me here and in the best performing Oppenheimer high yield munis, not available to me at Scottrade.
  • I have been following HYM for a while and by no means am I an expert in bonds or bond funds, but it does seem like this category has some merit.

    I have been following several funds, PYMDX is one but I am also very interested in MMHAX (LW at FIDO).

    Any thoughts on MMHAX.lw or further opinions on "The case for HYM"?


  • Matt, PYMDX/PHMIX and MMHAX are the two I normally have money in, going in and out, partially, in steps, based on T rate trajectory and trading ranges. They're both up 4%+ ytd.

    Fyi, MMD is a top-performing muni cef run by the same managers as MMHAX. Bob DiMella, one of the management team (and I think the lead, though he's not id'd as such by M*), has been on WealthTrack in the past, the last time maybe a year or two ago - you could get the flavor from that interview if you want to search for it.

    Found my way to HY munis about two years ago, and until the markets change, I'm done with ~ all investment-grade muni oef's. Cef's (which the article emphasizes) are a different animal; I usually own one or two, but opting for the oef's right now.

    Like the article says, HY muni funds aren't nearly as junky or default-risky as corporate HY; the default rates on the former are much lower, and the muni funds typically have higher average quality than corporates. For example, Pimco and Mainstay are about 60% and 50% investment grade, respectively.

    Best -- AJ
  • Thanks AJ.

    I too have grown tired IG muni et al; I still own MITFX (BMO inter.) but have been taking it down to eventually invest in HYM (PHMIX and/or MMHAX). I've been delaying; do you think it is a good time to DCA into them now?

    I have been itching to get started, but It's almost like paralysis by analysis; I watch and wait (market timing?) and when i finally pull-the trigger (pardon the cliche') it tanks almost immediately (seemingly).

    Any thoughts are greatly appreciated and welcome!!


  • Here is something to think on and what I have done and I am currently doing when I buy a fixed income. Leading up to a FMOC meeting where interest rates are expected to be increased most fixed income funds drop in value; however, because there is still good demand for fixed income they seem to recover after the rate increase announcements. This is how I have been buying. Buying the dips around FMOC meetings.

    You might want to chart the funds you are interested in and look at their price path around FMOC meeting time. If you can find a buy pattern that centers around what I have described above then you might be on to something.

  • edited April 2017
    Interesting approach O_S. Where is there a calendar of FOMC meetings?


    Just did a Google search and found the calendar!

    Any further thoughts and opinions are certainly welcome!!
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