Best Bond FundsTax-free income funds invest mainly in municipal bonds. Municipal bonds are debt issued by a state, city, or other municipality. The debts are used for general governmental needs or to finance special public projects. Municipal bonds pay interest that is free from regular federal income tax, and state-specific bonds can provide residents of those states with income free from state and, in some cases, local income taxes as well.
Top performing high yield municipal closed end funds of 2016 are:
- MFS High Income Municipal Fund (CXE)
- Pioneer Municipal High Income Fund (MHI)
- MFS High Yield Municipal Trust Fund (CMU)
- MFS Municipal Income Fund (MFM)
- Nuveen Municipal High Income Opportunity Fund (NMZ)
- Pioneer Municipal High Income Advantage Fund (MAV)
MFS High Income Municipal Fund (CXE)This MFS High Income Municipal Fund utilizes its assets to purchase non-investment grade municipal securities. This fund has $273 million of assets. The fund sponsor is Massachusetts Financial Services. The fund managers are Gary Lasman and Geoffrey L. Schechter. The total expense ratio fee is 2.12%.
More: Top 10 National Municipal Bond Closed End Funds
This top fund has a yield of 5.47%. This high yield municipal fund has returned 22.19% over the past 1 year, 9.49% over the past 3 years, and 9.94% over the past 5 years.
As of 2016, the top 4 sectors are Health/Hospitals, Health/Long-term Care, Municipal Tobacco, and IDB. Top 4 states allocation is California, Texas, Illinois, and New Jersey.
Pioneer Municipal High Income Fund (MHI)Pioneer Municipal High Income Fund is ranked with 3 stars rating by Morningstar. This Pioneer fund seeks high current income exempt from regular Federal income tax with capital appreciation through investment in investment grade US municipal securities. The fund manager is David Eurkus since 2003. The total expense fee is 1.02%. This fund also has a high yield of 5.86%.
The past 5 years performance is as follows:
- Year 2016: 10.12% (YTD)
- Year 2015: -0.47%
- Year 2014: 11.99%
- Year 2013: -6.69%
- Year 2012: 14.68%
Nuveen Municipal High Income Opportunity Fund (NMZ)Nuveen Municipal High Income Opportunity Fund uses its asset to buy high yield municipal debts. This fixed income fund is managed by John Miller since 2003. This fund is popular among investors with $863 million of assets. The current yield is 6.27%.
More: Top 6 High Yield Municipal Bond Closed End Funds 2015
This bond fund has a 3 year average return of 12.38%. The annual portfolio turnover rate is 9%. Top 5 debt sectors are: Tax Obligation/Limited, Health Care, Education and Civic Organ, US Guaranteed and Consumer Staples.
High Yield Bond Fund Performance
|No||FUND NAME||Ticker||Base Expense||Yield||YTD Return|
|1||MFS High Income Municipal||CXE||1.42%||5.47%||12.58%|
|2||Pioneer Municipal High Income||MHI||1.02%||5.86%||12.44%|
|3||MFS High Yield Municipal Trust||CMU||1.27%||5.54%||11.12%|
|4||MFS Municipal Income||MFM||1.15%||5.16%||10.57%|
|5||Nuveen Muni High Inc Opp||NMZ||1.07%||6.27%||8.80%|
|6||Pioneer Muni High Inc Adv||MAV||1.21%||6.07%||7.03%|