NMT: A Municipal Bond CEF For Massachusetts Taxpayers

2025-04-03 08:00:00 ET

Summary

• Nuveen Massachusetts Quality Municipal Income Fund invests in investment-grade municipal securities exempt from federal and Massachusetts income taxes, with a 7.2% yield based on market price.
• Single-state municipal bond funds can be more tax advantageous, especially if local governments also exempt income, though this is unclear for Massachusetts.
• Comparing NMT to the Nuveen Quality Municipal Income Fund helps assess if state tax savings justify owning NMT over a national municipal bond CEF. I found that to be unclear.
• My Hold rating takes the uncertainty into consideration plus the fact that NMT is now selling at a premium, a rarity for this CEF.

Introduction

In the past, I have reviewed single-state municipal bond funds for California, New Jersey, and New York. There are other states where high state income taxes should make such funds attractive too. Here, I will review the Nuveen Massachusetts Quality Municipal Income Fund ( NMT ). Its performance will be compared to a similarly invested national municipal bond CEF to help judge whether the extra state tax savings justify owning NMT....

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