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If investors are looking at the Muni - Bonds fund category, Nuveen High Yield Municipals Bond A (NHMAX - Free Report) could be a potential option. NHMAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
NHMAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
Nuveen is based in Chicago, IL, and is the manager of NHMAX. Since Nuveen High Yield Municipals Bond A made its debut in June of 1999, NHMAX has garnered more than $7.56 billion in assets. The fund is currently managed by John V. Miller who has been in charge of the fund since December of 2000.
Performance
Of course, investors look for strong performance in funds. NHMAX has a 5-year annualized total return of 6.23% and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 8.9%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of NHMAX over the past three years is 3.21% compared to the category average of 7.93%. Looking at the past 5 years, the fund's standard deviation is 4.23% compared to the category average of 8.3%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.88, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, NHMAX has a positive alpha of 1.9, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, NHMAX 's junk bond component-bonds rated 'BB' or below-is at 27.24%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 51 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, NHMAX is a load fund. It has an expense ratio of 0.74% compared to the category average of 0.83%. NHMAX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Nuveen High Yield Municipals Bond A ( NHMAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Nuveen High Yield Municipals Bond A ( NHMAX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Muni - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is NHMAX a Strong Bond Fund Right Now?
If investors are looking at the Muni - Bonds fund category, Nuveen High Yield Municipals Bond A (NHMAX - Free Report) could be a potential option. NHMAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
NHMAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
Nuveen is based in Chicago, IL, and is the manager of NHMAX. Since Nuveen High Yield Municipals Bond A made its debut in June of 1999, NHMAX has garnered more than $7.56 billion in assets. The fund is currently managed by John V. Miller who has been in charge of the fund since December of 2000.
Performance
Of course, investors look for strong performance in funds. NHMAX has a 5-year annualized total return of 6.23% and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 8.9%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of NHMAX over the past three years is 3.21% compared to the category average of 7.93%. Looking at the past 5 years, the fund's standard deviation is 4.23% compared to the category average of 8.3%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.88, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, NHMAX has a positive alpha of 1.9, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, NHMAX 's junk bond component-bonds rated 'BB' or below-is at 27.24%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 51 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, NHMAX is a load fund. It has an expense ratio of 0.74% compared to the category average of 0.83%. NHMAX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Nuveen High Yield Municipals Bond A ( NHMAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Nuveen High Yield Municipals Bond A ( NHMAX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Muni - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.