Is NHMAX a Strong Bond Fund Right Now?
Having trouble finding a Muni - Bonds fund? Nuveen High Yield Municipals Bond A (NHMAX) is a potential starting point. NHMAX carries 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 made its debut in June of 1999, and since then, NHMAX has accumulated about $6.38 billion in assets, per the most up-to-date date available. Stephen J. 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 2.22% and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of -1.48%, 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. The standard deviation of NHMAX over the past three years is 12.34% compared to the category average of 12.94%. The fund's standard deviation over the past 5 years is 12.11% compared to the category average of 13.72%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 1.25, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, NHMAX has a positive alpha of 0.57, 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 4.98% 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 74 % 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 0.80% compared to the category average of 0.94%. Looking at the fund 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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Nuveen High Yield Municipals Bond A ( NHMAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar 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 the Muni - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into NHMAX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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