For investors seeking momentum, Invesco New York AMT-Free Municipal Bond ETF (PZT - Free Report) ) is probably on radar now. The fund just hit a 52-week high, which is up roughly 4.1% from its 52-week low price of $23.24/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PZT in Focus
The underlying The ICE BofAML New York Long-Term Core Plus Municipal Securities Index comprises U.S. dollar-denominated, investment grade, tax-exempt debt publicly issued by New York or any U.S. territory, or their political subdivisions, in the U.S. domestic market with a term of at least 15 years remaining to final maturity. It charges 28 bps in fees (see all Municipal Bond ETFs here).
Why the Move?
Dovish Fed comments have kept long-term U.S. Treasury bond yields at subdued level this year. Also, there is limitation on the deductibility of state and local taxes (the SALT deduction) from federal taxes for taxpayers of the said states. U.S. citizens are currently under the tax season, which runs from Jan 1 to Apr 15 of each year. All these factorsmainly boost demand for muni bond ETFs.
More Gains Ahead?
Though the fund has a Zacks Rank #5 (Strong Sell), it has a positive weighted alpha of 1.40 which hints at more gains. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.
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