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Is NHMAX a Strong Bond Fund Right Now?

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Any investors hoping to find a Mutual Fund Bond fund could think about starting with Nuveen High Yield Municipals Bond A (NHMAX - Free Report) . NHMAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

NHMAX finds itself in the Nuveen family, based out of Chicago, IL. Since Nuveen High Yield Municipals Bond A made its debut in June of 1999, NHMAX has garnered more than $7.90 billion in assets. The fund's current manager, John V. Miller, has been in charge of the fund since December of 2000.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. NHMAX has a 5-year annualized total return of 3.75% 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 1.53%, 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. Compared to the category average of 13.55%, the standard deviation of NHMAX over the past three years is 11.72%. Looking at the past 5 years, the fund's standard deviation is 9.24% compared to the category average of 11.92%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.13, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, NHMAX has a positive alpha of 1.45, 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 has 6.17% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.

However, it is worth noting that 66 % 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 0.72% compared to the category average of 0.79%. From a cost perspective, NHMAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $3,000; 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, this fund looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into NHMAX too 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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