RiverNorth's O'Neill: Muni funds are 'in the 99th percentile of cheapness'

Steve O'Neill, portfolio manager at RiverNorth, says the average municipal-bond closed-end fund has a discount of 10.5 percent, which over the last 25 years would be in 'the 99th percentile of cheapness.' While O'Neill makes the case for buying muni bonds, he says the case for closed-end funds is largely because of the discounts being oversized, noting that the rest of the fixed-income market has not seen discounts get that big. O'Neill notes that if interest rates are peaking, the turning of the trend should help closed-end funds -- and particularly muni funds -- narrow the discount and generate bigger gains moving forward.