NEARX: For Your Safe Money

09/30/2015 9:00 am EST


Robert Carlson

Editor, Retirement Watch

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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