Using taxable municipals, and specifically MainStay MacKay U.S. Infrastructure Bond (MGOIX), as a complement to traditional taxable bond portfolios will help allow clients to diversify their sector allocation, increase exposure to higher quality assets, lower duration, and increase yield potential.
Historically, Taxable Municipal Bonds Have Had Low Correlation to Equities
Taxable Municipals Offer a Means to “Quality-up”
Fund & Category Exposure to Lower Rated Bonds (%)
1. Source: Morningstar as of 12/31/23. Represents monthly correlations. Correlation shows the strength of a relationship between two variables and is expressed numerically by the correlation coefficient. The correlation coefficient's values range between -1.0 and 1.0. A perfect positive correlation means that the correlation coefficient is exactly 1. Past performance is no guarantee of future results, which will vary. It is not possible to invest directly in an index.
2. Source: Morningstar as of 12/31/23. The Morningstar Intermediate Core Bond Portfolios invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, and hold less than 5% in below-investment-grade exposures. Intermediate-term core-plus bond portfolios invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, but generally have greater flexibility than core offerings to hold non-core sectors such as corporate high yield, bank loan, emerging-markets debt, and non-U.S. currency exposures.
Consider MainStay MacKay U.S. Infrastructure Bond Fund
Attractive alternative to corporate bonds
Provides access to high-quality taxable municipals, which offer attractive income potential and enhanced total return potential relative to other fixed income sectors.
Portfolio diversifier
With low correlation to equities, taxable municipal bonds can provide important diversification benefits to portfolios.
Complement to core bond funds
Low exposure to taxable munis.
About Risk
Before considering an investment in the Fund, you should understand that you could lose money.
Mutual funds are subject to market risk and fluctuate in value.
An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
Funds that invest in 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.
Municipal bond risks include the inability 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.