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NEARX: For Your Safe Money
09/30/2015 9:00 am EST
Where can short-term money be safe and still earn a decent yield? asks Bob Carlson, editor of Retirement Watch.
I'm often asked that question and it's tough to find a good answer in this low interest rate world.
One good option is the US Global Services Near-Term Tax-Free Bond (NEARX). This no-load fund seeks to generate tax-free monthly income and preserve capital.
It invests in high-quality, short-term bonds issued by state and local governments in the US. The fund maintains a weight-average bond maturity of five years or less.
The fund’s management looks for relative values and pricing anomalies in the tax-free market.
It also will dial the maturity of the portfolio up and down a bit when its model shows investors are too short-term bearish or bullish. That boosts returns with low risk.
It's done a good job at these tasks, because the fund is one of only a few that's had a positive total return for each of the past 20 years.
Management has kept the net asset value very stable. The recent yield was 1.68%. Remember, that's a tax-free yield, so on an after-tax basis it compares very favorably with other safe investments.
If you are looking for a new place to keep your safe money, consider the US Global Services Near-Term Tax-Free Bond.
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