MAYHX
BlackRock High-Yield Municipal-Inst
High-Yield Tax-Exempt Income
The BlackRock High-Yield Municipal-Inst fund (MAYHX) is designed to provide investors with a high level of income that is exempt from federal income taxes. This fund primarily invests in municipal bonds, with a significant portion of its assets allocated to medium- to low-quality bonds. This strategy allows the fund to offer a competitive yield of 4.13%, making it an attractive option for investors seeking tax-efficient income. The fund’s focus on municipal bonds means that it is particularly suitable for investors in higher tax brackets who are looking to maximize their after-tax income.
At A Glance
Executive Summary
MAYHX offers high tax-exempt income with a 4.13% yield, focusing on medium- to low-quality municipal bonds. Competitive expense ratio of 0.57%.
High tax-exempt yield of 4.13%. Strong performance with 15.36% 1-year return. Managed by BlackRock, a reputable fund family.
Higher risk due to focus on lower-quality bonds. Potential volatility with a beta of 1.41. Limited sector diversification.
Impressive Recent Performance
MAYHX has demonstrated strong performance over the past year, with a notable 1-year return of 15.36%. This performance is particularly impressive when compared to its benchmark, the BBG Muni USD Index, which returned 7.51% over the same period. The fund’s ability to outperform its benchmark highlights its effective management and strategic allocation to high-yield municipal bonds. This recent performance may appeal to investors looking for funds that have shown resilience and growth potential in the municipal bond sector.
Risk and Volatility Considerations
Investors should be aware of the risks associated with the BlackRock High-Yield Municipal-Inst fund. The fund’s focus on medium- to low-quality bonds inherently carries higher credit risk, which can lead to increased volatility. This is reflected in the fund’s beta of 1.41, indicating that it is more volatile than the market. Additionally, the fund’s standard deviation of 1.44% and a max drawdown of -2.9% suggest potential fluctuations in value. While the fund offers a high yield, investors should consider their risk tolerance and investment horizon before committing to this fund.
Competitive Expense Ratio
One of the standout features of MAYHX is its competitive expense ratio of 0.57%. This is relatively low for a fund in the muni junk bond category, where expense ratios can often be higher due to the active management required to navigate the complexities of lower-quality municipal bonds. A lower expense ratio means that more of the fund’s returns are passed on to investors, enhancing the overall yield and making it a cost-effective choice for those seeking high-yield municipal bond exposure.
Portfolio Composition and Holdings
The portfolio of the BlackRock High-Yield Municipal-Inst fund is heavily weighted towards municipal bonds, with 94.71% of its assets allocated to this sector. The top holdings include BlackRock Liquidity MuniCash Instl, Puerto Rico Commonwealth, and California Infrastructure & Economic Development Bank Revenue bonds. These holdings reflect the fund’s strategy of investing in high-yield municipal bonds to achieve its income objectives. The fund’s allocation to cash is 4.86%, providing some liquidity to manage redemptions and take advantage of new investment opportunities.
Comparison with Similar Funds
When compared to similar funds, MAYHX holds its ground with a strong 1-year return of 15.36% and a yield of 4.13%. For instance, the DWS Strategic High Yield Tax-Free-Inst (NOTIX) has a higher 1-year return of 17.97% but also comes with a higher expense ratio of 0.63%. Meanwhile, the Allspring High Yield Municipal Bond-Inst (WHYIX) offers a lower yield of 4.70% with a slightly lower expense ratio of 0.56%. These comparisons highlight MAYHX’s competitive positioning in terms of yield and cost, making it a viable option for investors seeking high-yield municipal bond exposure.
Suitability for Risk-Tolerant Investors
The BlackRock High-Yield Municipal-Inst fund is particularly suitable for risk-tolerant investors who are seeking high levels of tax-exempt income. Given its focus on medium- to low-quality municipal bonds, the fund is best suited for those who can withstand potential volatility and are looking for long-term income generation. The fund’s strong recent performance and competitive expense ratio further enhance its appeal to investors who prioritize yield and are comfortable with the associated risks of investing in lower-quality bonds.
Conclusion: A Strategic Choice for Income Seekers
In conclusion, the BlackRock High-Yield Municipal-Inst fund (MAYHX) stands out as a strategic choice for investors seeking high tax-exempt income. With a yield of 4.13% and a strong 1-year return of 15.36%, the fund offers compelling benefits for those in higher tax brackets. While the focus on medium- to low-quality bonds introduces higher risk, the fund’s competitive expense ratio and effective management by BlackRock make it a noteworthy option for risk-tolerant investors. As always, potential investors should consider their individual risk tolerance and investment goals before adding MAYHX to their portfolio.
Similar Securities
PTHAX: Putnam Tax-Free High Yield-A | High Yield Muni Bonds
PTHAX offers a 3.68% yield with a focus on lower-rated municipal bonds, providing tax-free income with a competitive expense ratio of 0.96%.
ISHAX: Invesco Short-Duration High-Yield Muni-A | Tax-Exempt Income Investment
ISHAX offers a 4.05% yield with a focus on tax-exempt income, outperforming its benchmark with a 10.31% 1-year return.
ORNAX: Invesco Rochester Municipal Opportunity-A | High-Yield Tax-Exempt Income
ORNAX offers high-yield, tax-exempt income with a 5.16% yield, focusing on below investment grade municipal bonds, ideal for risk-tolerant investors.
ACTHX: Invesco High-Yield Municipal-A | Tax-Exempt Income with High Yield
ACTHX offers a 5.14% yield with a focus on medium and lower-grade municipal securities, providing tax-exempt income for high-risk investors.
PRFHX: TRPrice Tax-Free High Yield-Inv | High Tax-Free Income
PRFHX offers a 3.67% tax-free yield with a 0.67% expense ratio, outperforming its benchmark with a 13.63% 1-year return.
Futher Reading
https://finance.yahoo.com/quote/MAYHX/”>Yahoo: BlackRock High-Yield Municipal-Inst
https://ftcloud.fasttrack.net/web/chart/MAYHX
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