In This Article:
On the lookout for a Muni - Bonds fund? Starting with BlackRock Strategic Municipals Opportunities A (MEMTX) should not be a possibility at this time. MEMTX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify MEMTX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
BlackRock is responsible for MEMTX, and the company is based out of New York, NY. Since BlackRock Strategic Municipals Opportunities A made its debut in October of 2006, MEMTX has garnered more than $1.77 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. MEMTX has a 5-year annualized total return of 3.82% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.38%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. MEMTX's standard deviation over the past three years is 3.5% compared to the category average of 7.42%. The standard deviation of the fund over the past 5 years is 2.99% compared to the category average of 7.64%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. MEMTX has a modified duration of 2.96, which suggests that the fund will decline 2.96% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 5.05% means that a $10,000 investment should result in a yearly payout of $505.