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Having trouble finding a Muni - Bonds fund? Nuveen High Yield Municipals Bond A (NHMAX - Free Report) is a potential starting point. NHMAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify NHMAX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
NHMAX is a part of the Nuveen family of funds, a company based out of Chicago, IL. Since Nuveen High Yield Municipals Bond A made its debut in June of 1999, NHMAX has garnered more than $6.40 billion in assets. John V. Miller is the fund's current manager and has held that role since December of 2000.
Performance
Of course, investors look for strong performance in funds. NHMAX has a 5-year annualized total return of 6.5% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.99%, 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. NHMAX's standard deviation over the past three years is 4.83% compared to the category average of 8.02%. The fund's standard deviation over the past 5 years is 4.13% compared to the category average of 8.11%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. NHMAX has a modified duration of 9.81, which suggests that the fund will decline 9.81% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 6.72% means that a $10,000 investment should result in a yearly payout of $672.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 1.23, 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 1.86, 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 31.38%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 49 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, NHMAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.85%. From a cost perspective, NHMAX is actually cheaper than its peers.
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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is NHMAX a Strong Bond Fund Right Now?
Having trouble finding a Muni - Bonds fund? Nuveen High Yield Municipals Bond A (NHMAX - Free Report) is a potential starting point. NHMAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify NHMAX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
NHMAX is a part of the Nuveen family of funds, a company based out of Chicago, IL. Since Nuveen High Yield Municipals Bond A made its debut in June of 1999, NHMAX has garnered more than $6.40 billion in assets. John V. Miller is the fund's current manager and has held that role since December of 2000.
Performance
Of course, investors look for strong performance in funds. NHMAX has a 5-year annualized total return of 6.5% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.99%, 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. NHMAX's standard deviation over the past three years is 4.83% compared to the category average of 8.02%. The fund's standard deviation over the past 5 years is 4.13% compared to the category average of 8.11%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. NHMAX has a modified duration of 9.81, which suggests that the fund will decline 9.81% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 6.72% means that a $10,000 investment should result in a yearly payout of $672.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 1.23, 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 1.86, 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 31.38%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 49 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, NHMAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.85%. From a cost perspective, NHMAX is actually cheaper than its peers.
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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.