The new fund has taken in over $13 million in net inflows since its inception, reaching $30 million in assets under management as of June 6, according to VettaFi.
MNBD, listed May 20 on the NYSE with a 50 basis point expense ratio, is sub-advised by Brown Brothers Harriman & Co and employs an active, bottom-up investment approach to protect investors’ capital and generate attractive risk-adjusted returns, according to a statement from the firm.
“Advisors have favored gaining access to the municipal bond market through active management but now have more choices to consider through ETFs,” Todd Rosenbluth, head of research at VettaFi said. “Active management can sort through the myriad of issues to seek out those with relatively strong fundamentals.”
The active ETF is a fit for investors looking to unlock the benefits of muni bonds, including reliable federally tax-free income, resilience to rising rate environments, and strong diversification benefits to balanced portfolios.
The fund invests in a differentiated portfolio of investment-grade municipal bonds, balancing BBH’s conviction with prudent diversification. BBH’s bottom-up investment approach seeks to provide peace of mind and supplement tax-free yields with opportunities to earn excess returns. BBH utilizes independent research and a proprietary quantitative framework to assess each security’s valuation, credit, and long-term return potential in the fund. Portfolio exposures are built one bond at a time by daily adherence to these criteria, said a statement from the firm.
As part of the fund’s investment process, BBH considers ESG factors for each investment in the portfolio, according to ALPS.
With over 50,000 issuers and dozens of different types of bond structures and sectors, the municipal market features the greatest diversity within the overall bond market, according to ALPS.
Two other ETFs in the muni bond space to consider include the VanEck Intermediate Muni ETF (ITM ) and the JPMorgan Municipal ETF (JMUB).
For more news, information, and strategy, visit the ETF Building Blocks Channel.
