When comparing these two intermediate investment grade municipal bond ETFs, the edge still goes to the passive VanEck Vectors Intermediate AMT-Free Municipal Index ETF (ITM) v. the active IQ MacKay Municipal Intermediate ETF (MMIT)
VanEck’s ITM has a deeper depth of liquidity, a slightly lower management fee and hedging capability via options which combine to make this an efficient exposure to this part of the market. ITM has modestly outpaced MMIT in year-to-date performance.
The IQ MacKay Municipal Intermediate ETF (MMIT) is actively managed which should give the advantage to the fund managers regarding being opportunistic v. the index-based constraints of ITM. I continue to look for that advantage to demonstrate itself.
A negative of the MMIT ETF is reporting. It is a challenge to obtain current data on yields and durations which makes comparing this fund to alternatives difficult. Overall, I prefer the more transparent passive ETFs which have a much higher degree of transparency including current holdings.
This “face-off” will continue as the market unfolds in 2020.
Intermediate Municipal ETFs: ITM v. MMIT
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 5/15/2020 unless otherwise noted. (1) Data as of 3/31/2020.
Intermediate Municipal ETFs: ITM v. MMIT Face Off
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).
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Rebalance for Q1 2020.