NXJ: Municipal Bond Fund Designed For New Jersey High Earners

  • Nuveen New Jersey Quality Municipal Income Fund (NXJ) is rated Strong Buy for NJ residents and Buy for others due to its tax-free status and 7.6% yield.
  • The fund's portfolio focuses on high-quality, tax-exempt municipal bonds, with 80% in investment-grade securities and minimal exposure to non-investment-grade bonds.
  • NXJ's effective duration of 12.7 years and 40% leverage ratio provide significant investment exposure, making it attractive when interest rates fall.
  • With a recent payout increase and a current discount of nearly 9%, NXJ offers a compelling opportunity for high earners in high-tax states.
  • One concern investors need to track is the level of ROC needed to meet the increased payouts; currently over 60%.

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Introduction

I noticed that the Nuveen New Jersey Quality Municipal Income Fund (NYSE:NXJ) has not been reviewed since mine in 2022 gave it a Buy rating based on its to-date results and the size

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