ATOAX-WHERE TO PUT SOME CASH

“I want to keep my money in cash and get a decent interest rate, but my savings and money market accounts pay virtually 0%. Even CD rates that my bank offers aren’t that great and you pay taxes on top of that.”

Stop being complacent with your cash when you can safely earn some federally tax-free interest. ATOAX is a great option. Issued by Alpine Funds, this fund endeavors to provide high federal after-tax current monthly income with minimal principal fluctuation, enhancing return by capitalizing on fundamental and technical opportunities in the fixed income markets. The Fund invests primarily in extremely short-term municipal bonds from all over the country, most of which mature in a matter of weeks or months.

The basic idea for ATOAX is that the price of the fund is supposed to hover around $10 (which it’s done successfully since inception in 1994) while you earn comfortably 3.36% federally tax-free (you’d need a taxable CD to earn more than 5.08% to have a higher yield than that). Even through the tough months of last October and November, it hovered between $9.82 to $9.87. Currently it’s $10.11. It’s doesn’t move more than a penny a day and most times stays the same price for weeks. I’ve been using it for many of my conservative clients and it’s been working great.

Full Disclosure-I can’t call this a ‘cash alternative’ because technically it’s not, there’s no FDIC insurance, these are securities we’re talking about here. Extremely short muni bonds that mature in a week or few months are pretty darn safe and if for some reason one defaults, it wouldn’t affect the fund that much because the risk is spread out.

It only costs .5% to get into the fund and you can take your money out for free after one month. The funds expenses are also minimal. You even get some appreciation, as it’s up 1.89% YTD and 3.72% over the last 3 years with that 3.36% on top of that! I believe a fund like this belongs in everyone’s portfolio.

Happy Investing,

Ivan

http://www.alpinefunds.com/

http://67.134.217.27/default.asp?P=442773&S=442778

http://67.134.217.27/632953.pdf