Pioneer Municipal High Income Advantage (MAV) cut their distribution by 19%. after the market close. The distribution was decreased from $0.0525 to $0.0425. We would highly recommend selling if you own any of these shares.
Sister fund Pioneer Municipal High Income (MHI) did NOT cut their distribution for February. However, the fund has similar fundamentals and is likely to do so in the near future. The next distribution announcement will not be for another 30 days so we have time.
At the time of the cut, MAV had about 86% coverage and UNII was at 8 cents. Clearly management sees a significant amount of calls coming through and wants to reserve some of that UNII before it is all paid out.
MHI has slightly better coverage at 91% and UNII at 12.7 cents. Both are trending down.
Pioneer is a semi-annual issuer so the data from the funds is now quite old. In MAVs case it is 9/30/18 and for MHI 10/31/18.
ACTION: If you own MAV, sell it right away. If you own MHI, we recommend selling but it is not as imperative to do it right away. There's a chance that investors could sell MHI today in response to the MAV cut. Please use limit orders when placing a trade.
Please let us know if you have any questions.