ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • 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
    • ETF Data for Journalists
    • ETF Nerds
  • 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 Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Get Yield, Credit Quality With Municipal Bond ETF MNBD
ETF Building Blocks Channel
Share

Get Yield, Credit Quality With Municipal Bond ETF MNBD

Ben HernandezFeb 21, 2023
2023-02-21

As more investors are heading back to bonds, an ideal choice to get an added dose of yield as well as credit quality is municipal bonds. More specifically, exchange traded funds (ETFs) that offer muni exposure can provide efficient access.

There’s a lot of talk swirling in the capital markets about a potential recession. As the U.S. Federal Reserve continues to tighten monetary policy, they could do so at the detriment of the economy and spin it into a recession — some economic experts think we are already in one.

If that’s the case, municipal bonds are fiscally sound enough to withstand a recession. As opposed to other types of debt, municipal bonds ideally offer credit quality of higher caliber than, say, corporate bonds.

As Katherine Lynch of Morningstar noted, “thanks to a general trend of many state and local governments strengthening their fiscal positions over the past several years, credit quality in the muni market is seen to be exceptionally strong. That should help muni-bond funds ride out the kind of recession that could hurt corporate bonds or other credit sensitive parts of the fixed-income market.”

Of course, when it comes to fixed income, investors are also searching for yield. In the case of municipal bonds, there’s also the added benefit of tax-free income, which is always a plus.

“That’s especially the case when factoring in the primary benefit that comes from tax-exempt muni-bond funds: They’re free from federal income taxes,” Lynch added. “Investors can also avoid paying state taxes on the income they receive if they purchase municipal bonds in the state they live in, making them even more attractive than taxable bonds.”

Efficient Muni Access in 1 ETF

Given the vast array of municipal bonds available on the market, ETFs can offer easy access. Active ETFs, in particular, put the selection process in the hands of seasoned portfolio managers.

As such, one fund to consider is the ALPS Intermediate Municipal Bond ETF (MNBD B-). As mentioned, MNBD is actively managed and offers exposure to investment-grade, intermediate-term municipal bonds that are exempt from federal income tax.

While the default option in today’s rising rate environment is to opt for short-term bonds, intermediate bonds can offer higher yield if investors are willing to accept more duration risk. The fund’s investments may be fixed-, variable-, or floating-rate municipal securities that could include general obligation bonds and auction-rate municipal securities, according to VettaFi.

For more news, information, and analysis, visit the ETF Building Blocks Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

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