Preferred municipal CEFs have surged 3.8% in NAV since January, attracting tax yields investing advocates seeking leveraged tax-advantaged returns. Sector analysts project further NAV growth if rate cuts materialize. In both cases, the outcome has been a fairly reliable dividend over time, accompanied by a rising share price. Amplify CWP Enhanced Dividend Income ETF has a yield of around 4.6%. Amplify CWP International Enhanced Dividend Income ETF has a trailing 12-month yield of around 5.5%. Both are actively managed ETFs and have fairly high expense ratios of 0.56% and 0.66%, respectively. But if you are looking for consistent income from a covered-call strategy, these ETFs basically do what you would do if you chose to sell covered calls yourself. These additional protections may contribute to the lower average default rates, as was the case from 2020 to 2024: 0.9% for high yield munis, versus 2.4% for high yield corporates. 4 The difference is even more pronounced when looking at the iShares High Yield Muni Active ETF (HIMU), which had a default rate of just 0.1% from 2020 to 2024. 5 Recent GDP data reinforces bullish sentiment for dividend growth ETFs as part of tax yields investing models. Funds focused on consistent payout growth have seen inflows of $1.1B in Q2, signaling investor appetite for stable income streams.
