SNTIX - Sit Tax-Free Income

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Sit Tax-Free Income (SNTIX)
Expense Ratio: 0.82%
Expected Lifetime Fees: $24,879.15

The Sit Tax-Free Income fund (SNTIX) is a High Yield Muni fund started on 09/29/1988 and has $165.10 million in assets under management. The current manager has been running Sit Tax-Free Income since 10/23/1988. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

Market Vectors High-Yield Muni ETF (HYD)
Expense Ratio: 0.35%
Expected Lifetime Fees: $11,154.10

The Market Vectors High-Yield Muni ETF (HYD) is an Exchange Traded Fund. It is a "basket" of securities that index the High Yield Muni investment strategy and is an alternative to a High Yield Muni mutual fund. Fees are very low compared to a comparable mutual fund like Sit Tax-Free Income because computers automatically manage the stocks.

The Following High Yield Muni Funds Have Lower Fees Than Sit Tax-Free Income (SNTIX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBern High Income Municipal A ABTHX 43.0% 955 0.80%
AllianceBern High Income Municipal Adv ABTYX 43.0% 955 0.50%
American Century High-Yield Muni Instl AYMIX 27.0% 368 0.41%
American Century High-Yield Muni Inv ABHYX 27.0% 368 0.61%
American High-Income Municipal Bond A AMHIX 18.0% 2,600 0.64%
American High-Income Municipal Bond F-1 ABHFX 18.0% 2,600 0.76%
American High-Income Municipal Bond F-2 AHMFX 18.0% 2,600 0.48%
BlackRock High Yield Municipal Instl MAYHX 31.0% 284 0.74%
Columbia High Yield Municipal Z SRH1Z 23.0% 937 0.60%
Columbia High Yield Municipal Z SRHMX 23.0% 937 0.60%
Dreyfus High Yield Muni Bd I DYBIX 41.1% 190 0.74%
DWS Strategic High Yield Tax Free Inst NOTIX 30.0% 2,000 0.67%
DWS Strategic High Yield Tax Free S SHY1Z 30.0% 2,000 0.67%
DWS Strategic High Yield Tax Free S SHYTX 30.0% 2,000 0.67%
Eaton Vance High-Yield Municipal Inc I EIHYX 19.0% 698 0.68%
Franklin High Yield Tax-Free Inc A FHT1Z 8.9% 9,000 0.63%
Franklin High Yield Tax-Free Inc A FRHIX 8.9% 9,000 0.63%
Franklin High Yield Tax-Free Inc Adv FHYVX 8.9% 9,000 0.53%
Goldman Sachs High Yield Muni Instl GHYIX 27.0% 3,500 0.57%
Hartford Municipal Opportunities I HHMIX 41.0% 393 0.65%
Invesco Van Kampen High Yield Muni Y ACTDX 16.0% 6,400 0.57%
Ivy Municipal High Income Fund Class I WYMHX 4.0% 1,200 0.70%
Legg Mason WA Muni High Income A STXCZ 24.0% 931 0.78%
Legg Mason WA Muni High Income I LMHIX 24.0% 931 0.65%
Lord Abbett High Yield Municipal Bond I HYMIX 40.9% 1,700 0.62%
MainStay High Yield Municipal Bond Fund Class I MMHIX 154.0% 702 0.65%
Managers AMG GW&K Muni Enhanced Yield I GWMEX 31.0% 284 0.65%
MFS Municipal High-Income A MMH3Z 21.0% 2,500 0.69%
MFS Municipal High-Income A MMHYX 21.0% 2,500 0.69%
Northern High Yield Muni NHYMX 9.2% 394 0.80%
Nuveen High Yield Municipal Bond I NHMRX 31.0% 6,800 0.66%
Oppenheimer AMT-Free Municipals Fund Class Y OMFYX 30.0% 2,500 0.72%
Oppenheimer Limited Term Municipal A OPITX 21.0% 4,700 0.73%
Oppenheimer Limited Term Municipal Fund Class Y OPIYX 21.0% 4,700 0.48%
PIMCO High Yield Municipal Bond A PYMAX 33.0% 382 0.79%
PIMCO High Yield Municipal Bond D PYMDX 33.0% 382 0.79%
PIMCO High Yield Municipal Bond I PHMIX 33.0% 382 0.54%
Pioneer High Income Municipal Y HIMYX 65.0% 757 0.67%
Prudential Municipal Hi-Inc Z PHIZX 24.0% 676 0.62%
Putnam Tax-Free High Yield A PTHAX 14.0% 1,100 0.80%
Putnam Tax-Free High Yield Y PTFYX 14.0% 1,100 0.57%
RS High Yield Municipal Bond A RSHMX 20.0% 253 0.70%
RS High Yield Municipal Bond Y RHMYX 20.0% 253 0.41%
T. Rowe Price Tax-Free High-Yield PRFHX 12.9% 2,200 0.68%

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Why Are These Metrics Important?

Turnover represents how much of a mutual fund's holdings are changed over the course of a year through buying and selling. Active mutual funds have an average turnover rate of about 85%, meaning that funds are turning over nearly all of their holdings every year. A high turnover means you could make lower returns because: 1) buying and selling stocks costs money through commissions and spreads and 2) the fund will distribute yearly capital gains which increases your taxes. Look for funds with turnover rates below 50%. For comparison, ETF turnover rates average around 10% or lower.

Generally, smaller funds do better than larger ones. The more assets in a mutual fund, the lower the chance that it will beat its index. Managers outperform an index by choosing stocks that are undervalued. In order to find these undervalued stocks, the manager has to know more than his competitors to develop an "edge." There are only a finite number of stocks a mutual fund manager can reasonably analyze and actively track to gain such a competitive edge. When the fund has more assets, the manager must analyze large companies because he needs to take larger positions. Large companies are more efficiently priced in the market and it becomes increasingly difficult to get an edge.