Comments on: Chasing yields: Closed end municipal bond funds http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/ A site to share my tips, tools, and humble thoughts on the journey to wealth Thu, 11 Mar 2010 08:35:38 -0800 http://wordpress.org/?v=2.8.5 hourly 1 By: Alice http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/comment-page-1/#comment-2571 Alice Wed, 14 Mar 2007 20:28:30 +0000 http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/#comment-2571 Thanks for your site. I am now looking at closed-end funds to better my investments. Your information and expertise is very welcome at this time. Thanks for your site.

I am now looking at closed-end funds to
better my investments. Your information
and expertise is very welcome at this time.

]]> By: ML http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/comment-page-1/#comment-2501 ML Mon, 26 Feb 2007 04:48:04 +0000 http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/#comment-2501 Scott, You're right. I looked up VWLTX at Yahoo and the current yield is 4.66% from a monthly dividend of $0.044 and a current price of $11.32. I'm not sure why Vanguard reports the figure it does. I did use 4.65% in the example I gave. I think it's a matter of POV whether 0.6% on top of 4.65% is a lot. As the yield curve re-normalizes, leverage should provide more extra yield. Scott,

You’re right. I looked up VWLTX at Yahoo and the current yield is 4.66% from a monthly dividend of $0.044 and a current price of $11.32. I’m not sure why Vanguard reports the figure it does. I did use 4.65% in the example I gave.

I think it’s a matter of POV whether 0.6% on top of 4.65% is a lot. As the yield curve re-normalizes, leverage should provide more extra yield.

]]> By: Scott http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/comment-page-1/#comment-2499 Scott Sun, 25 Feb 2007 19:28:22 +0000 http://www.1stMillionAt33.com/2007/02/chasing-yields-closed-end-municipal-bond-funds/#comment-2499 I have never understood Vanguard's yield rates. If you click on distributions, you'll see that each month's distribution, divided by share price, is higher than their yield. So what's the difference? Are they buying bonds at a premium for their higher distributions, and then taking the hit in NAV? If that were the case, you'd expect a downward trend in share price over time, but you don't see that. Nuveen, as far as I can tell, is using the equivalent of Vanguard's Distribution Yield, not Yield. From that perspective, Vanguard gives around 4.6%. Still not 5.2%, but I'm not sure the extra 0.6% is worth the increased volatility. YMMV. I have never understood Vanguard’s yield rates. If you click on distributions, you’ll see that each month’s distribution, divided by share price, is higher than their yield. So what’s the difference? Are they buying bonds at a premium for their higher distributions, and then taking the hit in NAV? If that were the case, you’d expect a downward trend in share price over time, but you don’t see that.

Nuveen, as far as I can tell, is using the equivalent of Vanguard’s Distribution Yield, not Yield. From that perspective, Vanguard gives around 4.6%. Still not 5.2%, but I’m not sure the extra 0.6% is worth the increased volatility. YMMV.

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