What if I told you I'd found a way to protect your portfolio from this twitchy market without giving up big gains (and income)? asks Michael Foster, closed-end fund expert and editor of CEF Insider.

I'm talking about municipal bonds, debts issued by state and local governments to fund badly needed infrastructure projects. And no matter how much the politicians bicker, you can take this to the bank: trillions of infrastructure cash will be spent. The economy depends on it.

I recommend buying munis through a CEF, rather than trying to navigate this market on your own. Let's start with the Nuveen Quality Muni Income Fund (NAD), one of the largest muni-bond funds, with over $2.7 billion in assets under management.

That heft, combined with Nuveen's massive presence in the muni-bond market, has helped NAD snap up the best issuances for years.

But that's not the best part. NAD also trades at a huge 11.7% discount to net asset value (NAV, or the combined value of the muni bonds it holds), while MUB trades at the intrinsic value of its portfolio. That nicely sets up NAD for stronger outperformance as its discount narrows.

Finally, NAD yields 4.7%. And its real dividend is, of course, much higher, as its dividends are tax-free to most Americans.

Our second muni CEF, the BlackRock MuniYield California Fund (MCA) trades at a 9.8% discount to NAV while paying a luxurious 4.5% tax-free yield.

MCA's management firm, BlackRock, is one of the best in the bond world. With over 7 trilliondollars under management, they have the kind of market access the rest of us can only dream of. And that's why MCA has done this over the last decade.

With its long history of outperformance and its high dividend, MCA is an obvious choice if you're looking to sidestep volatility and grab a high income stream.

Finally, there's the Invesco Muni Opportunities Trust (VMO). It's geographically diversified, with its $810 million in assets across every part of the country. VMO's 9.3% discount to NAV is also amazing. If that isn't enough, VMO also pays a 5% tax-free dividend, which is equivalent to an 8% yield for some taxpayers.

Finally, the latest addition to our model portfolio is BlackRock MuniYield Quality Fund II (MQT). That's because MQT's focus on quality makes it safer than these alternatives, which is crucial for someone looking to avoid volatility.

At the same time, MQT's ridiculously low discount to NAV, at 11.3%, gives it more upside than any of these funds, since that's nearly twice as much as its average discount. NAD, on the other hand, has averaged a 7% discount over the last decade (and 12.2% over the last year). That means there's less upside there than with MQT.

A final consideration is that, given MQT's recent distribution cuts but higher dividend coverage, the likelihood of a cut in the next nine to 12 months is very low, while cuts to these other funds' distributions, while still unlikely, are a bit more probable than with MQT.

Ultimately, this means that a long-term position in MQT is your best bet for muni exposure. But you could add additional, smaller positions in these three funds if you want to further diversify across the muni space.

Either way, a diversified portfolio of CEFs — including one or more muni-bond CEFs — is the best way to get a high income stream while limiting your downside in a market tumble.

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