RiverNorth Flexible Duration Municipal Income Fund II, Inc. (XRFZX)
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RFMZ: Still The Best Value Even As Discount Tightens
RiverNorth Flexible Municipal Income Fund II remains the most attractively valued among its peers, trading at a deep 8.71% discount. RFMZ's hybrid strategy leverages both municipal bonds and muni CEFs, offering tactical opportunities but also heightened volatility and expense ratios. The fund's 7.42% distribution yield is appealing, but coverage remains low, with destructive return of capital likely to persist.
RFMZ: The Return Is Largely Return Of Capital
RiverNorth Flexible Municipal Income II aims to exploit CEF discounts in the municipal bond space but delivers sub-market, unattractive income. RFMZ's 7.9% distribution is misleading; only 3.16% is true income, with the rest being return of capital—well below competing muni funds. The fund's strategy of capturing CEF discount-to-NAV reversion has not worked in practice, as evidenced by persistently low real yields.
RFMZ: Discount Narrows Making It Less Appealing
RFMZ offers exposure to both muni CEFs and individual bonds, but high leverage and layered fees limit its appeal for municipal bond investors. The fund's managed distribution policy boosts yield, but coverage is weak, and much of the payout is tax-deferred return of capital, not tax-exempt income. RFMZ and its sister funds are best used as swap candidates to exploit discount/premium differentials, but current discounts are less compelling.
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RiverNorth Flexible Duration Municipal Income Fund II, Inc. Profile
| NASDAQ Exchange | US Country |
Overview
RiverNorth Flexible Municipal Income Fund II, Inc. is a closed-end management investment fund company that was established on June 11, 2020, with its headquarters located in West Palm Beach, Florida. The company is primarily focused on generating current income that is exempt from regular U.S. federal income taxes. In addition to its primary objective, it also aims to achieve a secondary investment objective of total return. The firm utilizes a range of strategies and investments to meet its objectives, catering to investors seeking tax-exempt income while also considering the total return on their investments.
Products and Services
- Current Income Generation
- Total Return Investments
The Fund's primary objective is to generate current income that is exempt from regular U.S. federal income taxes. This is achieved through investments in various tax-exempt municipal bonds and other securities. The focus on tax-exempt income makes it an attractive option for investors looking to minimize their federal tax liability on investment income.
In pursuit of its secondary objective of total return, the Fund invests in a mix of assets that have the potential for capital appreciation in addition to yielding tax-exempt income. This dual focus aims to provide investors with a balance of income generation and the potential for growth in their investment's value over time, making it a versatile choice for a broad range of investment strategies.
