Make a Quick Buck Off Putnam's Purchase

 

The (PMO Quote)Putnam Municipal Opportunities fund takes a little more risk -- 10% of the money is in bonds longer than 10 years, and 23% in bonds rated BBB or below. The units also trade at 92 cents on the dollar, or $12.03 per $13.16 in assets. The yield is 4.84% tax free.

The figures are similar for (PGM Quote)Putnam Investment Grade Municipals. This fund's holdings are all high grade, with a duration of between five and 10 years. Once again you're paying 92 cents on the dollar -- $10.05 per unit, against $10.94 in assets -- and getting a 4.88% tax-free yield.

(PYM Quote)Putnam High-Yield Municipals offers slightly more risk, and at $7.38 per unit it trades at 93 cents per dollar of assets. But it pays out more too: a tax-free yield of 5.28%. In the top tax bracket you'd need to earn 7.34% to take home the same amount.

These are useful discounts, especially if you were looking to put some money into munis in the first place. Stay tuned.

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In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.

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