NDMO - NDMO: Lowering Expectations After A Double-Digit Rally (Rating Downgrade)
2024-04-25 13:44:44 ET
Summary
- Nuveen Dynamic Municipal Opportunities Fund has performed strongly in 2024 - but that primarily due to investors narrowing the discount to NAV.
- Municipal bond performance in 2024 has been mixed, and the outlook remains clouded going forward as inflation and the Fed's benchmark interest rate remain high.
- I believe a downgrade is the prudent move here, and greater value is present in alternative options.
Main Thesis & Background
The purpose of this article is to evaluate the Nuveen Dynamic Municipal Opportunities Fund (NDMO) as an investment option. This is a diversified municipal bond fund with a variety of sector allocations and credit ratings. Its primary objective "seeks total return through income exempt from regular federal income taxes and capital appreciation".
When 2024 got underway I had a fairly bullish outlook for NDMO. I felt munis as a whole were due for a boost and this fund in particular was going to perform strongly because of its wide discount to NAV. Looking back, January was certainly a good time to pick up some shares!...
NDMO: Lowering Expectations After A Double-Digit Rally (Rating Downgrade)