We're seeing more of the 2010 year-end data points coming in, and in the category of highest-yielding municipal bond fund, there's a bit of a surprise: Pioneer High Income Municipal Fund led all its peers by returning 7.14 percent last year. Why is that a surprise? Because the Pioneer fund doesn't own any general-obligation bonds issued by state and local governments, a mainstay of municipal-bond funds. Instead, the fund turned its focus toward revenue bonds from non-governmental agencies, such as hospitals and airports.
State and local governments have been facing revenue shortfalls lately, with their tax bases eroding. Those deficits have pushed a lot of investors out of the muni market, and resulted in an overall loss of 4.5 percent for municipal bonds in the fourth quarter of 2010. Hence, you get results like a municipal bond fund that outperforms because it doesn't act like a municipal bond fund.
For the record, the top five muni-bond funds for 2010, according to Zacks Investment Research:
Pioneer High Income Municipal A
Invesco Van Kampen High Yield Municipal A
Aim High Income Municipal A
Waddell & Reed Municipal High Income A
Black Rock High Yield Municipal A
No comments:
Post a Comment