Municipal bonds (munis) have been a linchpin for advisors building effective, tax-efficient portfolios for their clients in this lower-for-longer yield environment. However, with a Fed taper almost a near-term certainty, a monolithic index approach to the sector may be unwise, and many investors are looking toward active strategies better equipped to adapt to the bond market ahead.
In the upcoming webcast, Hidden Income Your Munis Are Missing: An Expert Perspective, Joseph Gotelli, Vice President, Portfolio Manager, American Century Investments; and Matt Lewis, Vice President, Head of ETF Implementation and Capital Markets, American Century Investments, will dive into what investors are missing—and what risks they might be accidentally taking—in their traditional approaches and present an active muni strategy that looks across the entire market opportunity set instead of being tied to a benchmark’s methodology.
The American Century Diversified Municipal Bond ETF (NYSEArca: TAXF) is an actively managed municipal bond fund that combines investments in thoroughly researched high yield and investment-grade municipal bonds. Designed for investors seeking current income, the fund dynamically adjusts investment grade and high yield exposures based on prevailing market conditions.
The muni bond ETF seeks consistent tax-free income; dynamically allocates to investment grade and up to 35% high yield to take advantage of prevailing market conditions; employs an active, time-tested process designed to identify attractive issues with low default risk; and aligns risk exposures with highest-conviction ideas.
Additionally, the Avantis Core Municipal Fixed Income ETF (AVMU) invests primarily in investment-grade quality municipal debt obligations from a diverse group of issuers. The actively managed fund’s investment process uses an analytical framework, including assessing securities’ expected income and capital appreciation, to seek securities with high expected returns.
AVMU pursues the benefits associated with indexing, such as diversification, controlled turnover, transparency of exposures, but the fund comes with the ability to add more value by making investment decisions using information in current yields through its active management process.
Financial advisors who are interested in learning more about munis can register for the Wednesday, December 8 webcast here.