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Strategies & Market Trends : Bonds & Bond Funds
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From: KyrosL12/17/2008 3:10:19 PM
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I've been buying PIA today. Another muni CEF with yield north of 11%. But this one has a relatively high percentage of BBB and below bonds. Still, at a tax equivalent yield of 16%+ it beats handily most junk bond funds, and it's not really junk. One fly in the ointment for this and other leveraged CEFs is that they may be forced to reduce their leverage because they are hitting the limits due to falling NAVs. This means reduction of future dividends. When I buy them I assume a 20-30% cut in future dividends.

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