Main Thesis
The purpose of this article is to evaluate the Nuveen AMT-Free Quality Municipal Income Fund (NYSE:NEA) as an investment option at its current market price. NEA continues to deliver sustainable gains, and I plan on adding to it as we get deeper in to 2021. While I added cash to the fund late last year, NEA now has a cheaper valuation than it did then despite rising in value. This is because the underlying NAV has been rising faster than the market price. Further, NEA added to its Michigan exposure through a merger, which I view positively. The state has its challenges, but it lowers NEA's reliance on the more troubled Illinois. Finally, muni bonds as a whole often tend to perform reasonably well during periods of inflation. While they won't be market leaders, the sector will usually generate positive returns. This is an important consideration right now as investors expect inflation to rise by year-end.
Background
First, a little about NEA. It is a closed-end fund with an objective "to provide current income exempt from regular federal income tax and the alternative minimum tax applicable to individuals by investing in an actively managed portfolio of tax-exempt municipal securities". Currently, the fund trades at $15.00/share and pays a monthly distribution of $.0585/share, yielding 4.68% annually. I have been a long-term bull on NEA, and that sentiment continued at the end of 2020. Over the past few months, NEA has continued to help diversify my portfolio and deliver gains, with a return over 1% since then:
| Price in Dec | Current Price | Distributions Paid | Total Return |
| $14.93 | $15.00 | $.117 | 1.25% |
Source: Seeking Alpha
As we dive deeper into 2021, I wanted to do another review of NEA to see if I should change my outlook. After review, I continue
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