ETF issuer IndexIQ has launched the IQ MacKay California Municipal Intermediate ETF (ticker: MMCA), the latest addition to the firm’s fast-growing suite of municipal bond ETF offerings.
The fund is actively managed by subadvisor MacKay Municipal Managers, the municipal bond team at MacKay Shields LLC, led by co-CIOs John Loffredo and Robert DiMella who have managed municipal strategies together for over 20 years. They are supported by an experienced investment team that provides expertise across all facets of the municipal bond market.
MMCA seeks to provide current income exempt from federal and California income tax, investing at least 80 per cent of its assets in California municipal bonds while seeking to enhance total return potential through the subadvisor’s active management approach. The Fund principally invests in investment-grade municipal bonds issued by or on behalf of the State of California with intermediate term duration with an effective duration between three and 10 years.
Scott Sprauer, Portfolio Manager who leads MacKay Municipal Managers’ California-focused strategies from their Los Angeles office says: “With the increased focus on infrastructure nationally, and the highly fragmented municipal bond market creating inefficiencies and additional risk, it can be challenging for investors to accurately and strategically target municipal bonds. As the largest issuer in the municipal market, the State of California presents attractive opportunities for investors looking for relief from elevated state income taxes. Our active management strategy aims to capitalize on these characteristics and drive greater return potential. We’re pleased to offer our clients access to these markets with the timely offering of MMCA.”
Salvatore Bruno, Chief Investment Officer with IndexIQ says: “We believe now is a great opportunity for investors to include more municipal bond holdings in their portfolios, and we are excited to be expanding our municipal bond ETF lineup with the launch of MMCA, building upon our partnership with MacKay Municipal Managers. Investor demand for municipal bond exposure has been increasing steadily over the last few years as advisors and investors search for robust income opportunities amidst uncertainty around inflation and the possibility of rising rates. MMCA is a timely new building block for fixed income investors, made all the more appealing by the power of the active managers behind the strategy.”
MMCA joins a family of municipal bond ETF offerings from IndexIQ that also includes the IQ MacKay Municipal Insured ETF (MMIN) and IQ MacKay Municipal Intermediate ETF (MMIT), as well as broader fixed income ETF offerings such as the IQ Ultra Short Duration ETF (ULTR) launched in 2019, and the IQ MacKay ESG Core Plus Bond ETF (ESGB) launched in June of this year.