Alternative to muni money market or short etf- jmst?

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am
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Alternative to muni money market or short etf- jmst?

Post by am » Sun May 24, 2020 7:53 am

What do you think of using JP Morgan ultra short muni income etf (JMST) as a higher yielding option instead of the vanguard muni money market or other short term muni etf options?

Yield is 1.36% and about 80% of the portfolio is AAA/AA/A. Expenses of .18. Duration of .89 years. During the big muni liquidity crunch in March, ETF fell slightly more than 1% which is tolerable (ishares short term muni etf sub fell close to 10%).

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anon_investor
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Re: Alternative to muni money market or short etf- jmst?

Post by anon_investor » Sun May 24, 2020 7:59 am

With only a 1.36% yield I would instead put my money in a FDIC insured HYS account or CD where I can get similar interest risk free. Check out the usual suspects: Ally Bank, Marcus, CIT Bank, etc.

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am
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Re: Alternative to muni money market or short etf- jmst?

Post by am » Sun May 24, 2020 8:13 am

anon_investor wrote:
Sun May 24, 2020 7:59 am
With only a 1.36% yield I would instead put my money in a FDIC insured HYS account or CD where I can get similar interest risk free. Check out the usual suspects: Ally Bank, Marcus, CIT Bank, etc.
How about if your at 35% fed and have to pay net investment tax?

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anon_investor
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Re: Alternative to muni money market or short etf- jmst?

Post by anon_investor » Sun May 24, 2020 8:46 am

am wrote:
Sun May 24, 2020 8:13 am
anon_investor wrote:
Sun May 24, 2020 7:59 am
With only a 1.36% yield I would instead put my money in a FDIC insured HYS account or CD where I can get similar interest risk free. Check out the usual suspects: Ally Bank, Marcus, CIT Bank, etc.
How about if your at 35% fed and have to pay net investment tax?
FYI looks like the current yield is closer to 1.16% (it looks like it is trending down, 1.36% was end of April yield numbers):
https://am.jpmorgan.com/us/en/asset-man ... -46641q654

What is the goal for these funds?

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am
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Re: Alternative to muni money market or short etf- jmst?

Post by am » Sun May 24, 2020 9:02 am

anon_investor wrote:
Sun May 24, 2020 8:46 am
am wrote:
Sun May 24, 2020 8:13 am
anon_investor wrote:
Sun May 24, 2020 7:59 am
With only a 1.36% yield I would instead put my money in a FDIC insured HYS account or CD where I can get similar interest risk free. Check out the usual suspects: Ally Bank, Marcus, CIT Bank, etc.
How about if your at 35% fed and have to pay net investment tax?
FYI looks like the current yield is closer to 1.16% (it looks like it is trending down, 1.36% was end of April yield numbers):
https://am.jpmorgan.com/us/en/asset-man ... -46641q654

What is the goal for these funds?
Cash like reserves or first tiers of emergency fund. Also have I bonds, vanguard intermediate muni etf, business account federal money market and high yield savings for anticipated short term spending < 1 yr. Overall, this in total is about 3-4 yrs of expenses.

The federal money market in business account has low yield but wife is averse to any changes or risk in this account. Any suggestions would also be appreciated.

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grabiner
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Re: Alternative to muni money market or short etf- jmst?

Post by grabiner » Sun May 24, 2020 9:04 am

Vanguard has a similar mutual fund option, Short-Term Tax-Exempt, with a 1.17% yield on Admiral shares which have 0.09% expenses. The two funds had about the same recent volatility, losing 3% from March 9 to March 20 and recovering 2/3 of the loss by March 26.

In this particular situation, I would prefer a mutual fund over an ETF. In March, muni ETFs traded at large spreads and with substantial premiums and discounts because of liquidity issues; this is not something you want for your short-term holdings. (ETF.com says that JMST averaged a spread of about 0.75% during March.)

In a high tax bracket, short-term munis are a reasonable alternative to high-yield bank savings or CDs.
Wiki David Grabiner

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am
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Re: Alternative to muni money market or short etf- jmst?

Post by am » Sun May 24, 2020 9:07 am

grabiner wrote:
Sun May 24, 2020 9:04 am
Vanguard has a similar mutual fund option, Short-Term Tax-Exempt, with a 1.17% yield on Admiral shares which have 0.09% expenses. The two funds had about the same recent volatility, losing 3% from March 9 to March 20 and recovering 2/3 of the loss by March 26.

In this particular situation, I would prefer a mutual fund over an ETF. In March, muni ETFs traded at large spreads and with substantial premiums and discounts because of liquidity issues; this is not something you want for your short-term holdings. (ETF.com says that JMST averaged a spread of about 0.75% during March.)

In a high tax bracket, short-term munis are a reasonable alternative to high-yield bank savings or CDs.
Do you think the intermediate muni mutual fund VWIUX is also better than their muni index etf VTEB?

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grabiner
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Re: Alternative to muni money market or short etf- jmst?

Post by grabiner » Sun May 24, 2020 9:15 am

am wrote:
Sun May 24, 2020 9:07 am
grabiner wrote:
Sun May 24, 2020 9:04 am
Vanguard has a similar mutual fund option, Short-Term Tax-Exempt, with a 1.17% yield on Admiral shares which have 0.09% expenses. The two funds had about the same recent volatility, losing 3% from March 9 to March 20 and recovering 2/3 of the loss by March 26.

In this particular situation, I would prefer a mutual fund over an ETF. In March, muni ETFs traded at large spreads and with substantial premiums and discounts because of liquidity issues; this is not something you want for your short-term holdings. (ETF.com says that JMST averaged a spread of about 0.75% during March.)
Do you think the intermediate muni mutual fund VWIUX is also better than their muni index etf VTEB?
This is less of an issue, since both are being held for the long term; you aren't likely to want to sell a large amount of an intermediate-term bond fund in a short time. Also, VTEB can be held as a mutual fund VTEAX if you prefer that structure.
Wiki David Grabiner

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