Investment Opportunity: There are two municipal bond closed-end funds (CEFs) offering high tax-free dividends of 7.5% and 8%, which are appealing in the current overheated stock market.
Muni Bonds vs. Stocks: Municipal bonds have been overlooked despite their potential for higher yields compared to S&P 500 stocks, especially as individual munis are difficult for average investors to access.
Specific Funds Highlighted: The Invesco California Value Municipal Income Trust (VCV) and RiverNorth Managed Duration Municipal Income Fund II (RMMZ) are recommended for their strong performance and attractive yields.
Diversification Advice: Investors are encouraged to diversify beyond muni bonds by considering a broader portfolio that includes other income-generating assets, such as a suggested 10.2% monthly dividend portfolio.
Invesco California Value Municipal Income Trust (the Trust) is a diversified, closed-end management investment company. The Trust’s investment objective is to seek to provide common shareholders with a current income exempt from federal and California income taxes, consistent with preservation of capital. The Trust invests substantially all of its assets in a portfolio of California municipal securities. Under normal market conditions, approximately 80% of the Trust’s net assets will be invested in municipal securities. The Trust may invest up to 20% of its net assets in municipal securities rated below investment grade or that are unrated. Invesco Advisers, Inc. is the investment advisor of the Trust.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
