The edge still goes to the actively managed IQ MacKay Municipal Insured ETF (MMIN) in this face-off v. the passive iShares National Municipal Bond ETF (MUB).
Simply put MMIN’s active management, opportunistic capabilities and insured bond combination has provided higher yields and better performance year-to-date in this volatile marketplace.
While performance of actively managed municipal funds and ETFs v. an index and passively managed ETFs is not impressive, see S&P’s SPIVA Scorecards www.spindices.com, MMIN’s management team has been together for many years giving it the advantage to be opportunistic while the assets under management grow. The thesis I have is the smaller the fund, the more impactful single opportunistic buying opportunities can be on the returns of that fund.
Two negatives for MMIN still exist:
Smaller ETFs are inherently less liquid than larger ETFs, so if a rapid exit at the price you want is your goal, then perhaps MUB is a better option.
By its nature as an active fund, it is less transparent than MUB.
The $15billion iShares National Municipal Bond ETF (MUB) does what it was created for: tracks the investment grade municipal bond market and provides tremendous liquidity for those that need it.
Municipal ETFs: MUB v. MMIN
Sources: iShares.com, NYLinvestments.com and Yahoo.com. Table is provided for illustrative purposes only. Past performance is not a guarantee of future results. Data as of 5/6/2020. unless otherwise noted. (1) Data as of 4/302020.
Municipal ETFs Face Off: MUB v. MMIN
At the time of this writing, JR Rieger’s fixed income related holdings include investment grade individual municipal bonds, insured municipal bonds, a municipal bond money market fund and a position in the VanEck Vectors High-Yield Municipal Index ETF (HYD).
Past performance of any investment product or index referenced in the Rieger Report is not an indication of or guarantee of future results.
The Rieger Report LLC is not an investment advisor, and the Rieger Report LLC makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any statements set forth in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other investment product or vehicle. A financial advisor should be contacted to determine what may be best for your individual needs. The Rieger Report LLC is not a financial or tax advisor. A tax advisor should be consulted to evaluate the impact of any tax-exempt securities on portfolios and the tax consequences of making any particular investment decision. No legal relationship is created between you and Rieger Report LLC.
The Rieger Report LLC does not act as a fiduciary or investment advisor. While the Rieger Report LLC has obtained information from sources it believes to be reliable, the Rieger Report LLC does not perform any audit or undertake verification of any information it receives.
The Rieger Report Rankings and model portfolios are opinions of relative ranking among the peer group analyzed as of the date expressed and not statements of facts. Rieger Report model portfolios are intended for illustration only. Any opinion or analysis decisions are not to be construed as recommendations to purchase, hold or sell any securities or to make any investment decisions, and do not address the suitability of any security. The Rieger Report LLC does not assume any obligation to update the content in this publication in any form or format.
Your use of any information from this document or presentation is at your own risk and without recourse against Rieger Report LLC, its members, managers, or employees. To the maximum extent permitted by law, Rieger Report LLC disclaims any and all liability in the event any information, commentary, analysis, and/or opinions prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.Municipal Bond ETF Model Portfolio
Rebalance for Q1 2020.