Having trouble finding a Muni - Bonds fund? Nuveen High Yield Municipals Bond A (NHMAX) is a potential starting point. NHMAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various 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

Nuveen is based in Chicago, IL, and is the manager of NHMAX. Nuveen High Yield Municipals Bond A debuted in June of 1999. Since then, NHMAX has accumulated assets of about $6.80 billion, according to the most recently available information. Stephen Candido is the fund's current manager and has held that role since April of 2023.

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 1.8% 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 -1.62%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 69%, the standard deviation of NHMAX over the past three years is 12.34%. Over the past 5 years, the standard deviation of the fund is 12.14% compared to the category average of -37%. This makes the fund more volatile than its peers over the past half-decade.

This fund has a beta of 1.15, 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 1.79, 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 6.34% 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 75 % 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 2.11% compared to the category average of 0%. Looking at the fund from a cost perspective, NHMAX is actually more expensive 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.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively strong performance, worse downside risk, and higher fees, Nuveen High Yield Municipals Bond A ( NHMAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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