Prudential Municipal High-Income A (PRHAX) Fund

Muni bond fund is another popular investment fund among investor especially a high income earner and retiree. One of the best feature of this fund is it provides regular income exempt from federal tax rate to investor. One of this best muni bond funds review is Prudential Municipal High-Income fund. Details review is described below.

Prudential Municipal High-Income A (Ticker: PRHAX)

The Prudential Municipal High-Income fund’s objective is to achieve the maximum amount of income that is not subjected to federal income taxes. This Prudential fund invests >80% of its investable assets in municipal bonds, which are fixed-income securities issued by states and municipalities. The income provided by this fund is free from regular federal income tax. The investments may include certain municipal bonds of which the interest is subject to the federal alternative minimum tax (AMT). The fund's management normally invests in municipal bonds that it believes may provide above-average yields.

PRHAX Fund Details
Prudential Municipal High Income
  • Fund Inception Date: January 22, 1990
  • Ticker Symbol: PRHAX (Class A)
  • CUSIP: 74440M104
  • Beta (3yr): 1.20
  • Rank in category (YTD): 53
  • Category: High Yield Muni
  • Distribution Rate: 5.24%
  • Net Assets: $ 568.77 million
  • Sales Load: 4.0%
  • Expense Ratio: 0.87%
  • Capital Gains: N/A
  • Number of Years Up: 16 years
  • Number of Years Down: 4 years
  • Average Maturity: 12.2 years
  • Average Duration: 7.9 years
updated on 9/29/2011

Susan Courtney is the fund’s manager of this high yield muni fund since April 2005. This fund was introduced to public in January 1990. The expense ratio of this PRHAX fund (0.87%) is a bit lower compared to the average in the category (1.04%). To invest in brokerage account, the minimum initial investment of this top rated muni bond fund is $2,500 with $100 minimum subsequent investment. And for IRA account or tax deferred account, the minimum initial investment is $1,000. The 12b1 fee of this fund is 0.30% and the front-end sales load fee is 4.00%. The current yield of this fund is 5.24%. The average duration of this PRHAX fund is 7.9 years.

Since its inception in 1990, this Prudential Municipal High Income fund has experienced 16 years positive return and 4 years negative return. The best 1-year total return was achieved in 2009 (23.04%) whereas the worst performance was in 2008 (-15.27%). The PHRAX fund has 4-stars rating from Morningstar. As July 2011, the year-to-date return is 5.94% and the 5-year average return is 3.53%. The performance of this municipal bond fund is listed below:
  • 1-year: -0.10%
  • 3-year: 3.91%
  • 5-year: 2.68%
  • 10-year: 4.16%
The other classes available for this fund are Class B (PMHYX), Class C (PHICX) and Class Z (PHIZX). The expense ratio for Class B is 1.12%, Class C is 1.62% and 0.62% for Class Z.

This high yield muni fund uses Lipper High Yield Municipal Debt Funds Average as its benchmark. PHRAX can be purchased from 82 brokerages, include Merrill Lynch, JP Morgan, Schwab Retail, Fidelity Retails Funds Network, E Trade Financial, Firstrade, Morgan Stanley-Brokerage Accounts, LPL SAM Eligible, Edward Jones, E Trade No Load Fee, etc.

As of July 2011, the top 10 largest holdings out of 347 total holdings are AMR (2.9%), Tobacco Settlement Funding NJ (2.5%), Buckeye Ohio TOB Settlement (2.3%), North Texas Tollway Authority Revenue (2.1%), United Continental Holdings (1.5%), State of CA (1.4%), Foothill/Eastern Corridor Agency CA (1.2%), M-S-R Energy Authority CA (1.1%), Metropolitan Pier & Exposition Authority IL (1.0%) and Golden St. TOB Securitization California (1.0%).

According to the fund’s prospectus, investing in this high yield muni bond fund involves investment risks such as Principal Risk, Recent market events, Risk of increase in expenses, Fixed-income obligation risk, Credit risk, Municipal bonds (subject to credit risk, market risk and interest rate risk), Insured municipal bonds, Interest rate risk, Market risk, Junk bonds, etc.

Disclosure: No Position

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