Seeking Yields Of +7%
Use RMM and USA to gain exposure to two completely unrelated asset classes. Benefit from RiverNorth's expertise in capturing "discounts on discounts" in the municipal bond sector. Secure a 12% yield from the world's most profitable large-cap companies through USA.
RMM: It's A Cute Idea That Does Not, Quite, Work
RiverNorth Managed Duration Muni Inc Fd employs a fund-of-funds strategy targeting CEFs trading below NAV, aiming for enhanced returns. RMM's distribution yield appears attractive at 7.7%, but after adjusting for return of capital, the true yield is only 3.66%. RMM's leverage and low credit/interest rate risk positioning do not deliver superior after-tax income versus simpler municipal bond funds.
RMM: With Modest Returns And High Expenses, I'll Continue To Pass
I maintain a 'hold' rating on RMM, despite its attractive 8% yield and notable discount to NAV, due to lingering concerns from past reviews. Municipal bonds remain a core allocation for me, offering superior after-tax yields versus similarly rated corporates, especially as tax rates rise. RMM's current discount to NAV is appealing, but it's consistent with its historical range, so I don't see it as a standout bargain.
RMM: Buy The Recent Muni Dip
The recent 10-year Treasury yield spike presents a buying opportunity in the muni bond CEFs offering better NAV discount and high yield. RiverNorth Managed Duration Muni offers a 6.88% yield and relatively strong performance in 2024 due to the unique and adaptive fund strategy. RMM and its peer RMI (7% yield) are term funds with liquidation in 6-7 years, offering price stability and ensuring NAV discount closure, good for longer-term holding.
RMM: A Hybrid Approach To Muni Bonds With A Trading Strategy
RiverNorth Managed Duration Municipal Income Fund is a muni bond-focused fund managed by RiverNorth and MacKay Shields. A swap to RiverNorth Flexible Municipal Income Fund II based on relative valuations has worked well, and there could be more potential room for this to play out. RMM offers a managed 6.75% distribution based on year-end NAV, and that payout will need to be supported with capital gains and/or return of capital.
