State of Munis: Why Now, What’s Ahead

Active management is the use of a human element, such as a single manager, co-managers or a team of managers, to actively manage a fund’s portfolio. Active management strategies typically have higher fees than passive management.

Long-end treasuries refers to Long-Term Treasury Bonds that are U.S. government bonds that have maturities longer than 10 years.

Tax Loss Swap refers to a tax-planning strategy when applied to mutual funds, entails selling one fund and investing in another that is similar. It allows to realize a loss while retaining the equivalent market exposure.

10 year cost structure The 10-year cost structure John is referring to is the maturity or callable date of the bonds. 

Taxable advanced refunding Advance refunding refers to the withholding of a new bond issue's proceeds for longer than 90 days before using them to pay off (refund) an outstanding bond issue's obligations.

Yield to Worst a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting.

Indexes

Bloomberg Municipal Bond Index is an unmanaged index that includes approximately 15,000 municipal bonds, rated Baa or better by Moody's, with a maturity of at least two years.

The High Yield Municipal Bond Composite Index consists of Bloomberg Municipal Bond Index and Bloomberg Municipal High Yield Index weighted 40%/60%, respectively. The Bloomberg Municipal High Yield Index is made up of bonds that are non-investment grade, unrated, or rated below Ba1 by Moody’s Investors Service with a remaining maturity of at least one year. The High Yield Municipal Bond Composite Index is MainStay MacKay High Yield Municipal Bond Fund’s secondary benchmark.

Bloomberg Municipal High Yield Index is an unmanaged index of municipal bonds with the following characteristics: fixed coupon rate, credit rating of Ba1 or lower or non-rated using the middle rating of Moody’s, S&P, and Fitch, outstanding par value of at least $3 million, and issued as part of a transaction of at least $20 million. In addition, the bonds must have a dated-date after December 31, 1990 and must be at least one year from their maturity date.

Bloomberg U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bondmarket, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid adjustable-rate mortgagepass-throughs), asset-backed securities, and commercial mortgage-backed securities

About Risk: Municipal bond risks include the ability of the issuer to repay the obligation, the relative lack of information about certain issuers, and the possibility of future tax and legislative changes, which could affect the market for and value of municipal securities. Bonds are subject to interest rate risk and can lose principal value when interest rates rise. Bonds are also subject to credit risk which is the possibility that the bond issuer may fail to pay interest and principal in a timely manner. Investing in below investment grade securities may carry a greater risk of nonpayment of interest or principal than higher-rated securities.

Please ask your clients to consider the investment objectives, risks, charges and expenses of the investment company carefully before investing.  The prospectus and, if available, the summary prospectus, contain this and other information about the fund and can be obtained by contacting you, the financial professional. Instruct your clients to read the prospectus or summary prospectus carefully before investing. 

New York Life Investment Management LLC engages the services of federally registered advisors. MacKay Shields LLC is an affiliate of New York Life Investments. The MainStay Funds® are managed by New York Life Investment Management LLC and distributed by NYLIFE Distributors LLC, 30 Hudson Street, Jersey City, NJ 07302, a wholly owned subsidiary of New York Life Insurance Company. NYLIFE Distributors LLC is a Member FINRA/SIPC.

This material contains the opinions of the MacKay Municipal Managers™ team of MacKay Shields LLC but not necessarily those of MacKay Shields LLC. The opinions expressed herein are subject to change without notice. This material is distributed for informational purposes only. Forecasts, estimates, and opinions contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Any forward-looking statements speak only as of the date they are made and MacKay Shields assumes no duty and does not undertake to update forward-looking statements. Past performance is no guarantee of future results, which will vary.  It is not possible to invest directly in an index

The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.

Neither New York Life Insurance Company, nor its affiliates or representatives provide tax, legal or accounting advice. Please contact your own professionals.

MacKay Municipal Managers is a team of portfolio managers at MacKay Shields. MacKay Shields is 100% owned by NYLIM Holdings, which is wholly owned by New York Life Insurance Company.

Not all products and services provided by MacKay Shields may be available to all investors, limited by applicable laws and regulations in certain jurisdictions. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of MacKay Shields.

“New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company.  

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