"What makes municipal bond ETFs different from equity funds is that distribution safety depends entirely on the creditworthiness of underlying borrowers and the interest rate environment, not corporate earnings or payout ratios. PZA holds only investment-grade bonds, meaning every issuer has been vetted by rating agencies as having strong ability to repay. The fund spreads risk across hundreds of individual bonds from different states, cities, and municipal agencies."
"Since launching in 2007, PZA has never missed a monthly payment-the kind of reliability municipal bond investors demand. The fund's distribution story mirrors the interest rate cycle: after bottoming during the low-rate environment, 2025 payments recovered to $0.8331 per share. This marks the first time distributions have exceeded the 2016 peak, signaling that higher rates are finally translating into stronger income for shareholders."
PZA generates income by collecting interest from a diversified portfolio of investment-grade municipal bonds issued by state and local governments across the United States. Distributions depend on the creditworthiness of underlying borrowers and the interest-rate environment rather than corporate earnings or payout ratios. The fund holds only investment-grade issuers and spreads exposure across hundreds of bonds to limit single-default risk. Since launching in 2007, PZA has never missed a monthly payment. Distributions recovered in 2025 to $0.8331 per share, surpassing the 2016 peak. The ETF yields about 3.9% but remains sensitive to interest-rate-driven price movement.
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