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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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CEF Spotlight: A High-Yield Municipal Fund
Pioneer Municipal High Income generates high distributions with low leverage. |
MORNINGSTAR - Sept. 27, 2011 - By Steven Pikelny
Pioneer Municipal High Income (MHI) is a high-yield municipal closed-end fund, or CEF, that generates most of its income through speculative-grade and nonrated municipal bonds. The fund has had above-average performance since inception in July 2003, and has been able to provide high distributions with lower-than-average leverage. Because high-yield municipal bonds are considered riskier than investment-grade munis, this fund is not suitable for all investors. However, for those looking to access the illiquid high-yield municipal-bond market, this fund may fit the bill.
Strategy: What's the Story?
MHI's investment objective is to generate high levels of tax-exempt income. It accomplishes this by investing at least 40% of its assets in speculative-grade and nonrated munis from various states. These junk bonds typically pay higher yields than investment-grade bonds as compensation for increased credit risk. The fund determines its sector, state, and maturity weightings by conducting top-down macroeconomic analysis followed by bottom-up fundamental research in an attempt to discover undervalued securities. Managers favor revenue bonds to general-obligation bonds due to their steady revenue streams.
As of July 31, about half of the fund's 134 holdings were non-investment-grade or unrated. The portfolio's average weighted credit quality was BB+, about average for its peer group (Morningstar determines average credit quality by placing more weight on lower-rated bonds). Currently, the fund has large exposure to health-care and transportation (33% and 16.5% of the portfolio, respectively). Its emphasis on revenue bonds is exemplified in its 1.22% allocation to a bond from Central Falls, Rhode Island, which is tied to the revenues of a detention faculty. Although pension obligations pushed this small city into default in August of this year, the detention center is still able to make its promised payments, as its revenues were unaffected. About 60% of holdings mature in more than 10 years. This, along with its lower-rated holdings, pushes the fund's leverage-adjusted duration (a measure of interest-rate sensitivity) to 12.6 years, which is on par with the peer average.
MHI is one of the least leveraged high-yield muni CEFs, with a leverage ratio of 1.33 (total assets/net assets), which is well below the peer average of 1.56. The fund's leverage is composed entirely of auction-rate preferred shares, which during the last full fiscal year had an interest rate of 0.4%.
For the complete article.
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| Stuff to look at |
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Income Security Recommendation January 2013 Issue.
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