IQ MacKay Municipal Intermediate ETF (MMIT)

ETF IQ MacKay Municipal Intermediate ETF (MMIN)

Profile:

Focus: MMIN is a passively managed exchange-traded fund (ETF) that invests in investment-grade municipal bonds with intermediate maturities. It seeks to provide current income exempt from federal and state income taxes for many investors.

Asset Allocation: The ETF invests in a diversified portfolio of municipal bonds issued by various state and local governments. The portfolio is typically weighted towards bonds with maturities ranging from 5 to 10 years.

Investment Strategy: MMIN employs a passively managed indexing strategy, tracking the performance of the S&P National AMT-Free Municipal Bond Index. This index comprises investment-grade municipal bonds with maturities of 1 to 10 years that are exempt from federal and state income taxes for many investors.

Objective:

The primary investment goal of MMIN is to generate current income exempt from federal and state income taxes for many investors, while also providing long-term capital appreciation.

Issuer:

IQ MacKay: IQ MacKay is a subsidiary of Invesco Ltd., a leading global investment management firm with over $1.4 trillion in assets under management. Invesco is known for its strong reputation and track record in the market, with experience managing a wide range of investment strategies.

Market Share:

MMIN is a relatively small ETF in the municipal bond market, with approximately $0.3 billion in assets under management. However, it holds a significant market share within the category of intermediate-term, tax-exempt municipal bond ETFs.

Total Net Assets:

As of October 26, 2023, MMIN has $307.4 million in total net assets.

Moat:

MMIN's competitive advantages include:

• Tax-exempt income: The ETF's focus on tax-exempt municipal bonds provides a significant advantage for investors in high-tax brackets.
• Passive management: The passively managed indexing strategy allows for lower expense ratios compared to actively managed funds.
• Diversification: The ETF's diversified portfolio mitigates risks associated with individual bond issuers and maturities.

Financial Performance:

MMIN has historically provided consistent returns with moderate volatility. Over the past 5 years, the ETF has generated an average annual return of 2.5%, with a standard deviation of 3.2%.

Benchmark Comparison:

MMIN closely tracks the performance of its benchmark index, the S&P National AMT-Free Municipal Bond Index. The ETF's tracking error is typically minimal, indicating its effectiveness in replicating the index's performance.

Growth Trajectory:

The municipal bond market is expected to experience moderate growth in the coming years, driven by factors such as continued infrastructure spending and low-interest rates. This could positively impact MMIN's growth trajectory.

Liquidity:

MMIN has an average daily trading volume of over 100,000 shares, indicating healthy liquidity. The ETF's bid-ask spread is also relatively tight, suggesting low trading costs.

Market Dynamics:

Factors affecting MMIN's market environment include:

• Interest rate environment: Rising interest rates can negatively impact the value of fixed-income investments like MMIN.
• Economic growth: A strong economy can lead to increased demand for municipal bonds, boosting their prices.
• Tax policy changes: Changes in tax laws could impact the attractiveness of tax-exempt municipal bonds.

Competitors:

Key competitors of MMIN include:

• iShares National AMT-Free Muni Bond ETF (MUB) - Market share: 45%
• Vanguard Tax-Exempt Bond ETF (VTEB) - Market share: 30%
• SPDR Nuveen AMT-Free Municipal Bond ETF (XHY) - Market share: 15%

Expense Ratio:

MMIN has an expense ratio of 0.25%, which is relatively low compared to other municipal bond ETFs.

Investment Approach and Strategy:

Strategy: MMIN passively tracks the S&P National AMT-Free Municipal Bond Index.

Composition: The ETF invests in a diversified portfolio of investment-grade municipal bonds with maturities ranging from 1 to 10 years.

Key Points:

• Tax-exempt income
• Passive management
• Diversification
• Moderate volatility
• Low expense ratio

Risks:

• Interest rate risk
• Credit risk
• Market risk
• Liquidity risk

Volatility:

MMIN's historical volatility is moderate, with a standard deviation of 3.2% over the past 5 years.

Market Risk:

The ETF's market risk is primarily associated with changes in interest rates and economic conditions.

Who Should Consider Investing:

MMIN is suitable for investors seeking:

• Tax-exempt income
• Moderate risk exposure
• Long-term capital appreciation

Fundamental Rating Based on AI:

Rating: 7/10

Analysis: MMIN exhibits several strengths, including its tax-exempt status, passive management, and diversified portfolio. However, its relatively small market share and limited liquidity compared to larger competitors slightly dampen its overall rating.

Resources and Disclaimers:

• IQ MacKay website: https://iqfunds.com/
• S&P National AMT-Free Municipal Bond Index: https://www.spglobal.com/spdji/en/indices/fixed-income/sp-national-amt-free-municipal-bond-index/
• Invesco website: https://www.invesco.com/

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.