A Guide to Massachusetts Muni Bond Funds and Their Risks

Massachusetts muni bond funds can be a great way to invest in your community, but it's essential to understand the risks involved. These funds invest in municipal bonds issued by Massachusetts cities and towns, which are generally considered to be low-risk investments.

The Massachusetts muni bond market is relatively small, which can make it more volatile than larger markets. This means that the value of your investment can fluctuate more easily.

Investing in Massachusetts muni bond funds can provide a steady stream of income through interest payments. These funds typically invest in bonds with high credit ratings, which reduces the risk of default.

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When evaluating Massachusetts muni bond funds, it's essential to consider their performance. Average annual total returns are a key metric, and you can expect them to range from 2-5% over the past few years.

These funds have historically provided stable returns, making them a popular choice for investors seeking low-risk options. Annual rate of return is another important factor to consider, as it gives you a clear picture of the fund's performance over time.

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Here are some key performance metrics to look out for:

These metrics will give you a comprehensive understanding of a Massachusetts muni bond fund's performance and help you make an informed investment decision.

The fees associated with Massachusetts muni bond funds can vary depending on the type of share class you invest in. For Class A shares, the maximum sales charge is 4.25%.

The Net Expense Ratio for these funds is 0.82%, but this rate is reduced due to contractual fee waivers and reimbursements. These reductions will continue until at least July 31, 2025.

The Gross Expense Ratio, which is the fund's total operating expense ratio, is 0.87%.

Here's a summary of the fees for Class A shares:

For Class I shares, there is no sales charge, but the Net Expense Ratio is 0.57%. The Gross Expense Ratio remains the same at 0.62%.

The Pricing History of an investment is crucial in understanding its performance over time. The data shows that the Net Asset Value (NAV) at close of trading on February 14, 25 was $3454.

The NAV has fluctuated over time, with a change of $0.02 since February 13, 25, which is a 0.20% change. This indicates a relatively stable NAV.

Here's a breakdown of the NAV changes over the past few months:

This table shows the NAV at close of trading for each of the mentioned dates.

Fees can be a complex topic, but let's break it down.

The Net Expense Ratio is a key metric to understand, reflecting the reduction of expenses from contractual fee waivers and reimbursements. This reduction will continue until at least July 31, 2025.

You'll notice that the Net Expense Ratio varies between funds, with some having a lower percentage than others. For example, the Net Expense Ratio for one fund is 0.57%, while another fund has a Net Expense Ratio of 0.82%.

The Gross Expense Ratio is another important metric, representing the fund's total operating expense ratio from the fund's most recent prospectus. This ratio is also subject to change and can be higher than the Net Expense Ratio.

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Some funds, like Class A shares, come with a Maximum Sales Charge of 4.25%. This is the maximum amount you'll pay to invest in the fund. On the other hand, Class I shares are available without a sales charge to eligible investors.

Here's a quick comparison of the fees for different types of shares:

Keep in mind that these fees are subject to change and may be affected by various factors, including the fund's performance and the elimination of contractual fee waivers and reimbursements.

A Massachusetts muni bond fund's primary focus is on generating a total return, with a strong emphasis on income that's exempt from federal income tax and Massachusetts personal income tax, if applicable. This means you can keep more of your earnings.

The goal of these funds is to provide a mix of income and potential for capital appreciation, so you can grow your investment over time.

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When it comes to understanding the underlying structure of a portfolio, it's helpful to know the distribution of assets within it.

The portfolio structure of the investment is comprised of various credit ratings, including AAA, AA, A, BBB, BB, and CC, which account for 81.58% of the total net assets. The remaining 18.42% is categorized as "Other Not Rated".

Here's a breakdown of the credit ratings:

It's worth noting that short positions, unlike long positions, lose value if the underlying asset gains value.

Let's take a closer look at the Share Class Information for this portfolio.

The class inception date is April 1, 2016.

The fund's Net Asset Value (NAV) as of February 14, 2025, is $8.90, with 3454 changes.

The most recent NAV change as of February 14, 2025, is $0.01, which represents a 0.11% change.

The fund number is 845.

Here's a list of the portfolio's holdings:

The Gross Expense Ratio is 0.62%, while the Net Expense Ratio is 0.57%, which is lower due to contractual fee waivers and reimbursements.

In Massachusetts muni bond funds, returns can vary greatly from year to year. The Bloomberg Municipal Bond Index, a benchmark for the municipal bond market, had a return of 1.05% in 2024.

Some Massachusetts muni bond funds have outperformed the Bloomberg Municipal Bond Index. For example, the 2023 return for one fund was 6.14%, while the Bloomberg Municipal Bond Index returned 6.4% that year.

However, not all funds have done well. In 2022, one fund had a return of -10.26%, while the Bloomberg Municipal Bond Index had a return of -8.53%.

Let's take a closer look at the returns for some Massachusetts muni bond funds. Here are the returns for the last 10 years:

Some funds have had significant returns in certain years. For example, one fund had a return of 7.31% in 2019, while another fund had a return of 4.85% in 2017.

It's worth noting that not all funds have performed well in all years. In 2022, one fund had a return of -10.26%, which is significantly lower than the Bloomberg Municipal Bond Index return of -8.53% that year.

The Massachusetts muni bond funds have experienced varying levels of returns over the years. For instance, in 2015, the annual rate of return at NAV was 3.11%.

The returns have been influenced by market fluctuations, with some years showing significant gains and others showing substantial losses. In 2022, the annual rate of return at NAV was -10.26%, while in 2023 it was 6.14%.

Morningstar ratings may vary among share classes, but they are based on historical risk-adjusted total returns. The Taxable-Equivalent Yield for a Fund's share class with a negative SEC 30-Day Yield is not provided, as it does not represent the yield that must be earned on a taxable investment.

Here's a summary of the annual rate of return at NAV for the Massachusetts muni bond funds from 2015 to 2024:

The average annual returns for investments can vary significantly over time. For example, in 2021, the average annual return for At NAV was 2.18%, while the Bloomberg Municipal Bond Index returned 1.52%.

Investors should note that past performance is not a guarantee of future results. In fact, the average annual return for Class C shares in 2021 was -10.00%, which is significantly lower than the At NAV return.

The returns for different classes of shares can also vary. For instance, Class I shares have no sales charge and may be purchased by specified classes of investors.

Here's a summary of the average annual returns for At NAV and the Bloomberg Municipal Bond Index for the past few years:

It's essential to consider these average annual returns when making investment decisions.

Investing in debt instruments can be a bit of a rollercoaster ride. As interest rates rise, prices usually fall, which means the value of your investment could decline.

Bond investments are particularly sensitive to changes in the credit quality of the issuer or borrower. This can lead to a decline in value, especially if the issuer is struggling financially.

Debt instruments with longer durations are generally more sensitive to rising interest rates, making them riskier investments. This means that even small changes in interest rates can have a big impact on the value of your investment.

During times of market turmoil, it may be difficult to value certain investments or even sell them at all. This can make it hard to get out of a bad investment if you need to.

Investments in derivatives can be highly volatile and involve leverage, which can magnify losses. This means that even small losses can quickly add up.

Below investment grade quality debt instruments, also known as high yield investments, are riskier and more volatile than higher-quality debt instruments. This is because they are more likely to default or already be in default.

Municipal bond investments can be significantly affected by adverse tax or court rulings, legislative or political changes, and market and economic conditions. This means that even small changes in the law or economy can have a big impact on the value of your investment.

Investing in a concentrated portfolio, such as one that focuses on a specific geographic region, can be riskier than investing in a more diversified portfolio. This is because the performance of the portfolio is closely tied to the economic and political conditions of that region.

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