Actively managed fund designed to provide targeted exposure to California munis
NEW YORK, N.Y., Dec. 21, 2021 -- IndexIQ, a leading provider of innovative investment solutions, today announced the launch of the IQ MacKay California Municipal Intermediate ETF (ticker: MMCA; the “Fund”), 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% 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 3 and 10 years.
Scott Sprauer, Portfolio Manager who leads MacKay Municipal Managers’ California-focused strategies from their Los Angeles office said:
"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 said:
"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.
For more information on the fund and on IndexIQ’s full suite of ETF offerings, please visit our website here.
For more insights on the municipal bond market and our Muni360 outlook, please visit: https://www.newyorklifeinvestments.com/investment-strategies/muni-360
IndexIQ, a New York Life Investments company, is a provider of exchange-traded funds (ETFs), with a decade of offering highly differentiated and innovative solutions to retail and institutional investors. With $4.9 billion in assets under management as of September 30, 2021, IndexIQ leverages the asset management capabilities of New York Life Investments' multi-boutique platform into its suite of offerings which include: fixed income, equities, alternatives, ESG components and specialty asset classes. For additional information on IndexIQ, visit newyorklifeinvestments.com/etf or follow us on Twitter or LinkedIn.
About MacKay Shields
MacKay Shields LLC (together with its subsidiaries, "MacKay”)*, a New York Life Investments Company, is a global asset management firm with $164 billion in assets under management as of September 30, 2021. MacKay manages fixed income and equity strategies for high-net worth individuals and institutional clients, through separately managed accounts and collective investment vehicles including private funds, CLOs, UCITS, ETFs, closed end funds and mutual funds. MacKay maintains offices in New York City, Princeton, Los Angeles, London and Dublin. For more information, please visit www.mackayshields.com or follow us on Twitter or LinkedIn.
*MacKay Shields is a wholly owned subsidiary of New York Life Investment Management Holdings LLC, which is wholly owned by New York Life Insurance Company.
Before considering an investment in the Fund, you should understand that you could lose money. 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. 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, in which the bond issuer may fail to pay interest and principal in a timely manner. High-yield or non-investment grade municipal bonds (commonly referred to as “junk bonds”) may be subject to increased liquidity risk as compared to other high-yield debt securities. The Fund is a new fund. As a new fund, there can be no assurance that it will grow to or maintain an economically viable size, in which case it could ultimately liquidate. A portion of the Fund’s income may be subject to state and local taxes or the alternative minimum tax. Because the Fund invests primarily in municipal bonds issued by or on behalf of the State of California and its political subdivisions, agencies, and instrumentalities, events in California are likely to affect the Fund’s investments and performance. These events may include fiscal or political policy changes, tax base erosion, and state constitutional limits on tax increases, budget deficits, and other financial difficulties. California may experience financial difficulties due to the economic environment. Any deterioration of California’s fiscal situation and economic situation of its municipalities could cause greater volatility and increase the risk of investing in California. Certain environmental, social, and governance (“ESG”) criteria may be considered when evaluating an investment opportunity. This may result in the Fund having exposure to securities or sectors that are significantly different than the composition of the Fund’s benchmark and performing differently than other funds and strategies in its peer group that do not take into account ESG criteria. 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.
Consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus and the statement of additional information include this and other relevant information about the Fund and are available by visiting www.newyorklifeinvestments.com or calling 888-474-7725. Read the prospectus carefully before investing.
“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. IndexIQ® is the indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC and serves as the advisor to the IndexIQ ETFs. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs, and NYLIFE Distributors LLC is a distributor of the ETFs. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC.
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