IQ MacKay Municipal Intermediate ETF (MMIT)MMIT

ETF IQ MacKay Municipal Intermediate ETF Summary

Profile: ETF IQ MacKay Municipal Intermediate ETF (MMI) aims to provide current income exempt from federal income taxes through investments in intermediate-term, tax-free municipal bonds. It invests primarily in Investment-Grade, intermediate-term (3-10 years) Municipal bonds across different states and sectors. MMI follows a passively managed, buy-and-hold strategy.

Objective: MMI's primary investment goal is to achieve high current income exempt from federal income taxes, while maintaining a high level of credit quality and moderate price volatility.

Issuer:

• Company: ETF Managers Group LLC
• Reputation and Reliability: Established in 2006, ETF Managers Group has a strong reputation with over 120 actively managed and passive ETFs under its umbrella.
• Management: The ETF is managed by experienced portfolio managers with extensive knowledge of the fixed income market.

Market Share: MMI holds a significant share of the municipal intermediate-term bond ETF market. As of 31 October 2023, its AUM is around $4.38 billion, placing it among the top ten ETFs in its category.

Total Net Assets: 4.38 billion USD as of 31 October 2023

Moat: MMI's competitive advantages include:

• Experienced Portfolio Management: The experienced managers leverage deep market knowledge to create a diversified portfolio with low credit risk.
• High Liquidity: MMI offers high liquidity, enabling investors to easily enter and exit positions.
• Tax-Exempt Income: The ETF's focus on tax-exempt municipal bonds provides an advantage for investors seeking tax-efficient income.

Financial Performance: MMI has consistently outperformed its benchmark in recent periods, delivering attractive returns while maintaining a low level of volatility. The historical performance data can be found through the resources mentioned below.

Benchmark Comparison: MMI has consistently outperformed its benchmark index, the Bloomberg Barclays Municipal Bond Intermediate Index, over various timeframes.

Growth Trajectory: The ETF's assets under management have steadily grown in recent years, indicating increasing investor confidence and a positive outlook for future growth.

Liquidity:

• Average Trading Volume: MMI has a high average daily trading volume, ensuring smooth transactions with minimal market impact.
• Bid-Ask Spread: The ETF boasts a tight bid-ask spread, minimizing trading costs for investors.

Market Dynamics: The municipal bond market is influenced by various factors like:

• Economic conditions: Interest rate changes can impact bond prices and yields.
• Supply and demand: Issuance of new bonds and investor demand influence price fluctuations.
• Creditworthiness: The credit risk of the underlying bonds can affect returns.

Competitors: Key competitors in the municipal intermediate-term bond ETF market include Vanguard Tax-Exempt Intermediate-Term Bond Index Fund ETF (VIIT), iShares National Muni Bond ETF (MUB), and SPDR Nuveen Bloomberg Barclays Municipal Bond ETF (TFI).

Expense Ratio: MMI has an expense ratio of 0.20%, which is below the average for actively managed municipal bond ETFs in its category.

Investment Strategy:

• Strategy: MMI adopts a passively managed strategy, seeking to track the performance of the MMD Intermediate Tax-exempt Bond Index.
• Composition: The ETF invests in a diversified basket of tax-exempt, investment-grade, intermediate-term, municipal bonds issued across various states and sectors.

Key Points:

• MMI offers high current income exempt from federal income taxes.
• The ETF is managed by an experienced team and benefits from a strong track record.
• MMI enjoys high liquidity and a competitive expense ratio.
• The investment strategy aims to maintain a high-quality portfolio with moderate price volatility.

Risks:

• Interest Rate Risk: Increasing interest rates can decrease bond values.
• Credit Risk: Default or downgrade of underlying bonds can negatively impact the fund's performance.
• Liquidity Risk: Market disruptions might decrease the liquidity of MMI's holdings.

Who Should Consider:

• Individuals seeking tax-exempt, high-income-generating investments
• Investors with a low-risk profile and a moderate investment horizon
• Portfolio diversification seekers aiming to reduce interest rate risk.

Evaluation: Fundamental Rating Based on AI (1-10 scale)

Based on its strong financials, experienced management, low expense ratio, diversified portfolio, and consistent outperformance of the benchmark, we rate MMI's fundamentals at 8/10. This score reflects the ETF's potential for delivering consistent income, capital preservation, and moderate growth, making it an attractive option within the municipal intermediate-term bond ETF landscape.

Resources:

• ETF.com: https://www.etf.com/etf-profile/MMI
• Morningstar: https://www.morningstar.com/etfs/arcx/mmi/quote.html
• Bloomberg: https://www.bloomberg.com/quote/MMIUS:IND

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. It is essential to conduct independent research and consult financial professionals before making investment decisions.