Thursday, July 19, 2012

Muni Closed-End Funds Portfolio Changes

My Mid-Year portfolio review is coming next week. I was thinking about doing it last week, but decided to wait for earnings.
Las couple of months I made changes in my Muni holdings.
Change number one: no more Nuveen closed-end funds. Looks like management sucks: funds are reducing payouts one after another. Today I sold Nuveen Select Quality Municipal Fund (NQS). Before that, I closed my biggest (for that moment) muni holding: Nuveen Municipal Market Opportunity Fund (NMO).
There are CEFs with better management. Currently I hold BlackRock Long-Term Municipal Advantage Trust (BTA), Invesco Van Kampen Trust for Investment Grade Municipals (VGM), Invesco Van Kampen Advantage Municipal Income Trust II (VKI).
Every position is a subject of trading around it. I did several trades around BTA. I also traded around Managed Duration Investment Grade Municipal Fund (MZF) and Dreyfus Strategic Municipal Bond Fund (DSM). Current strategy: buy at discount or small premium to net asset value and sell at premium above 4%. I know, DSM and MZF at times traded at 8% premium and I missed the profit. Well, that's life. You can't win everything. Anyway, every trade worked, with exception of NQS, where I'm about even, counting dividend.
Disclosure: I am long BTAVGMVKI.
Additional disclosure: I have no positions in other funds mentioned. Positions can change any time.

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