Investors interested in deriving stable returns that are exempted from Federal and New York income tax may consider New York municipal bond mutual funds. Though municipal bonds or “munis” come with lower yields than taxable bonds, they fetch better returns for investors in high tax brackets if we consider after-tax returns. These mutual funds are expected to provide a steady stream of tax free income in a volatile market.
Below we share with you four top-rated New York muni bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all muni bond mutual funds, investors can click here to see the complete list of muni bond funds .
Eaton Vance New York Municipal Income A (ETNYX – MF report) seeks tax-free current income. ETNYX invests a large chunk of its assets in municipal debt securities that are expected to provide return free from regular federal income tax and New York State and New York City personal income taxes. Eaton Vance New York Municipal Income A is a non-diversified fund and has a one-year return of 4.9%.
Craig Robert Brandon is the fund manager of ETNYX since 2005.
PIMCO New York Municipal A (PNYAX – MF report) invests the lion's share of its assets in debt securities whose interest is exempted from regular federal income tax and New York income tax. PNYAX may invest in “private activity” bonds having interest which is a tax-preference item for the purpose of the federal alternative minimum tax. The fund may also invest in other derivatives. PIMCO New York Municipal A is a non-diversified fund and has a one-year return of 3.6%.
As of Dec 2015, PNYAX held 77 issues with 5.36% of its assets invested in New York Liberty Dev Corp Libe Lib 5.75%.
T. Rowe Price New York Tax-Free Bond (PRNYX – MF report) seeks high tax-exempted income. PRNYX invests the majority of its assets in debt securities, income from which are not subject to federal, New York state, and New York City income taxes. T. Rowe Price New York Tax-Free Bond is a non-diversified fund and has a one-year return of 4.2%.
