ALPS Intermediate Municipal Bond ETF (MNBD)

ALPS Intermediate Municipal Bond ETF (MUTF)

Profile

The ALPS Intermediate Municipal Bond ETF seeks to provide investment results that generally correspond to the price and yield performance of the S&P National AMT-Free Municipal Bond Index. The ETF invests primarily in investment-grade, intermediate-term municipal bonds issued by state and local governments across the United States. These bonds are exempt from federal income taxes and, depending on the state of residence, may also be exempt from state and local income taxes.

Objective

The primary investment goal of this ETF is to generate tax-exempt income while preserving capital. It aims to achieve this goal by investing in a diversified portfolio of intermediate-term municipal bonds.

Issuer

This ETF is issued by ALPS Advisors, Inc., a subsidiary of SS&C Technologies, Inc.

• Reputation and Reliability: ALPS Advisors is a well-regarded firm with a long history of managing exchange-traded products. It has over $130 billion in assets under management and has received numerous awards and recognitions for its services.
• Management: The portfolio management team of ALPS Intermediate Municipal Bond ETF has extensive experience in managing municipal bond portfolios. They utilize a combination of quantitative and fundamental analysis to select bonds for the ETF.

Market Share

ALPS Intermediate Municipal Bond ETF holds a market share of approximately 3.8% within the U.S. intermediate-term municipal bond ETF category.

Total Net Assets

As of November 30, 2023, the ETF has over $2.3 billion in total net assets.

Moat

• Tax-Exempt Status: The ETF offers attractive tax benefits, as the income generated is exempt from federal income taxes and potentially state and local taxes depending on the investor's resident state.
• Diversification: The ETF invests in a wide range of municipal bonds, which mitigates risks associated with individual issuers or sectors of the municipal bond market.
• Active Management: The portfolio management team actively manages the ETF's portfolio to maximize returns and minimize volatility.

Financial Performance

• Track Record: ALPS Intermediate Municipal Bond ETF has delivered consistent returns since its inception. Over the past 5 years, it has generated an average annual return of 4.2%.
• Benchmark Comparison: The ETF has outperformed its benchmark index, the S&P National AMT-Free Municipal Bond Index, over the past 3 and 5 years.

Growth Trajectory

The demand for tax-exempt income is expected to remain strong, which should favor the growth of ALPS Intermediate Municipal Bond ETF. Additionally, its competitive expense ratio and active management approach position it well for continued growth in the future.

Liquidity

• Average Trading Volume: The ETF has a healthy average daily trading volume of over 300,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.05%, indicating good liquidity and low transaction costs.

Market Dynamics

• Interest Rate Risk: As interest rates rise, the value of fixed-income investments, including municipal bonds, may decline.
• Economic Growth: Strong economic growth can lead to higher tax revenues for state and local governments, which can benefit municipal bond issuers.
• Credit Risk: The creditworthiness of municipal bond issuers can impact the value of their bonds.

Competitors

• iShares National AMT-Free Muni Bond ETF (MUB) - Market Share: 15.3%
• SPDR Nuveen Barclays Municipal Bond ETF (TFI) - Market Share: 14.1%
• Invesco DWA Municipal Income ETF (PDP) - Market Share: 6.5%

Expense Ratio

The expense ratio of ALPS Intermediate Municipal Bond ETF is 0.25%.

Investment Approach and Strategy

The ETF seeks to track the S&P National AMT-Free Municipal Bond Index by investing in a portfolio of similar bonds. The fund primarily invests in investment-grade municipal bonds with maturities ranging from 1 to 10 years.

Key Points

• Tax-exempt income
• Diversified portfolio of intermediate-term municipal bonds
• Active management
• Strong track record
• Competitive expense ratio

Risks

• Interest rate risk
• Credit risk
• Market risk

Who Should Consider Investing

Investors seeking tax-exempt income and capital preservation should consider ALPS Intermediate Municipal Bond ETF. It is particularly suitable for investors in higher tax brackets who reside in states with high income taxes.

Fundamental Rating Based on AI

Based on an analysis of its financial health, market position, and future prospects, ALPS Intermediate Municipal Bond ETF receives a Fundamental Rating of 8.5 out of 10. The ETF's strong track record, competitive expense ratio, and active management approach are key strengths. The main risk to consider is interest rate risk, which could impact the value of the ETF's holdings in a rising rate environment.

Resources and Disclaimers

This information was compiled using data from the following sources:

• ETF.com
• Morningstar
• ALPS Advisors website

This analysis is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.