ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Artificial Intelligence
      • Beyond Basic Beta
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Direct Indexing
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Investing
      • ETF Education
      • ETF Strategist
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Institutional Income Strategies
      • Leveraged & Inverse
      • Managed Futures
      • Market Insights
      • Modern Alpha
      • Multifactor
      • Responsible Investing
      • Retirement Income
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Commodities
        • Gold/Silver/Critical Minerals
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Dual Impact Channel
  2. There’s Value Afoot in Municipal Bonds
Dual Impact Channel
Share

There’s Value Afoot in Municipal Bonds

Tom LydonSep 27, 2022
2022-09-27

Municipal bonds are participating in the 2022 fixed income market tale of woe, but broad-based municipal muni bond benchmarks are outperforming aggregate bond counterparts and some experts see opportunity in municipal debt.

Much of the current case for exchange traded funds such as the IQ MacKay Municipal Intermediate ETF (MMIT B+) revolves around value and robust fundamentals. MMIT, which turns five years old next month, is actively managed and looks to outperform the Bloomberg Municipal Bond Index 1-15 Year Blend Index.

MMIT’s status as an actively managed ETF is particularly relevant at a time when munis are dealing with interest rate pressure and while the credit outlook in this asset class is sturdy.

“The muni market has taken a beating this year, with net weekly inflows into muni mutual and exchange-traded funds negative for most of 2022, according to Refinitiv Lipper data. Yet their yields and tax benefits can make them an attractive investment,” reports Michelle Fox for CNBC.

The $300.2 million MMIT holds 411 municipal bonds with local general obligation bonds accounting for 27.1% of the fund’s portfolio. Education and water/sewer debt combine for 19.6% of the roster.

Amid faltering bond prices of nearly all stripes this year, advisors and experts recently stirred talk of considering municipal bonds and ETFs like MMIT as buy ideas after tax-loss harvesting. Speaking of taxes, that’s one of the primary benefits of muni debt.

“The tax benefits make munis particularly attractive to high-earners in high-income tax states. Those tax savings are even more critical in a time when stock returns are scarce. The market took a nosedive Friday, with the Dow setting a new low for the year according to CNBC.

As noted above, MMIT is an active fund, so there’s bound to be turnover. Its annual turnover rate is 43%, according to issuer data. Still, the ETF’s annual fee of 0.30% (after waivers) compares favorably with active mutual fund rivals.

“You can also get muni bond exposure through a mutual fund or ETF. Those who want a wide range of bond exposure, such as maturities, sectors, and credit, and have limited funds could look at investing in a mutual fund or ETF, according to the Municipal Securities Rulemaking Board,” noted CNBC.

As for credit concerns, those are minimal with MMIT because the fund devotes 88.2% of its weight to muni bonds rated A, AA, or AAA.

For more news, information, and strategy, visit the Dual Impact Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X