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MNBD holds a portfolio of US municipal bonds in the top four credit rating categories (AAA to BBB) that are exempt from federal income tax. Investments may be fixed-, variable- or floating-rate municipal securities that could include general obligation bonds and auction-rate municipal securities. The sub-adviser employs a bottom-up investment approach which includes ESG factors when selecting investments. The objective is to provide diverse exposure to high-quality, undervalued municipal securities with an average duration between three and seven years. Up to 20% of the funds assets may be…
Is MNBD's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
Treasuries are far from the only offenders when it comes to currently elevated bond yields. Typically docile, at least in yield terms, municipal bonds are also guests at this dubious party.
On the surface, the municipal bond market may not check the “dynamic” box. After all, individual muni bonds and ETFs such as the ALPS BBH Intermediate Municipal Bond ETF (MNBD) are positioned, rightly so, as conservative, income-bearing investments.
As advisors and experienced fixed income investors know, bond prices and yields move inversely to one another, meaning that when yields are high, prices have slipped. This may have some investors worried about buying bonds when yields are elevated, and it's certainly a valid concern in today's Treasury market.
Municipal bond ETFs such as the ALPS Intermediate Municipal Bond ETF (MNBD) are beloved by advisors and risk-averse investors for several reasons, such as steady income, tax benefits, and munis' reputation as a low-risk asset class. However, there are differences between “low risk” and “no risk.
Without the support of rate cuts by the Federal Reserve, it's been a lethargic year in terms of performance by municipal bonds and the related ETFs, but that doesn't mean advisors and fixed income investors should ignore this bond segment. In fact, the current municipal bond environment may be ripe for active management.