High earners favor tax-exempt municipal bonds over Treasuries as PZA offers a 3.9% yield with 217 consecutive monthly distributions.
The Invesco National AMT-Free Municipal Bond ETF (PZA) provides a 3.9% tax-free yield, attracting investors in the top federal tax bracket. The fund has paid monthly distributions for over 17 years, totaling 217 consecutive payments since 2007.
PZA tracks investment-grade municipal bonds exempt from federal income tax and the Alternative Minimum Tax. While its long-duration profile exposes it to price volatility from rising Treasury yields, the fund’s credit quality and distribution sustainability remain intact.
For high earners, the 3.9% tax-free yield competes with taxable Treasuries, which may offer lower after-tax returns despite higher nominal yields.