Hi there,
I've been doing some research since I'm interested in incorporating small allocations to leveraged municipal bond funds, but I'm a little confused by some of the data. Here are four interesting choices with their distribution yields and profiles:
- MYD 5.46% https://www.blackrock.com/investing/products/240208/blackrock-muniyield-fund-inc-usd-fund
- MQY 5.08 https://www.blackrock.com/investing/products/240259/blackrock-muniyield-quality-fund-inc-usd-fund
- MYF 6.01% https://www.blackrock.com/investing/products/240200/blackrock-muniyield-investment-fund-usd-fund
- MFT 5.82% https://www.blackrock.com/investing/products/240198/blackrock-muniyield-investment-quality-fund
The "Quality" products (MQY, MFT) make sense to me. They stay high in the credit tree and carry a higher percentage of insured bonds compared to their non-Quality counterparts (MYD, MYF), reducing the expected return.
The "Investment" products (MYF, MFT) also tilt toward toward higher credit ratings - and heavily to short maturities. Based on this, I would expect to see share price climb until the yields settle down to a lower percentage. Yet they're yielding more than than their non-Investment counterparts (MYD, MQY). They do not seem more highly leveraged. Am I naive about something fundamental that would explain the additional implied risk? Thanks in advance for any information.
Submitted December 01, 2018 at 09:19AM by Mister2112 https://ift.tt/2SpwOSM
