How to Invest in National Municipal Bonds
I think a lot of investors in California or New York might go to their advisor and say, "Build me a muni ladder with only credits from my state because of the tax benefits of doing so." But MMBD is national in its portfolio. It's run by Brown Brothers Harriman, which is the oldest private bank on Wall Street.
They've got a heritage of investing in the municipal market through an SMA strategy, through trust portfolios, as well as a mutual fund. And the ETF allows investors to tap into that experience and that expertise in the ETF wrapper. But importantly, in terms of the approach, what Brown Brothers prides themselves on is knowing all of the nuances.
Municipals are one of the most diverse categories in all of fixed income. There are different bond types, different issue types, and they also apply a level of conservatism and patience that they think benefits investors in this category. So when you think about certain credits in the municipal space that certain managers don't necessarily like to invest in because of a lack of liquidity or because they take time to sort of realize the long-term total return profile, Brown Brothers prides themselves on their ability to go out and pick and choose individual credits and maybe go into categories where other municipal bond managers aren't willing to do.
And it just crossed its three-year live track record. The relative performance in its category has been nothing short of spectacular. And we feel strongly that MMBD is a product that fits a varied set of needs for a varied set of investors.
Certainly, the municipal bond category relative to other fixed income categories has lagged year to date, and we view that as an opportunity from a mean reversion perspective, but also for investors, to your point, who are in higher tax brackets looking to maybe decrease their tax burden in the fixed income sleeve of their portfolio, but also tap into a management team that has been doing this for decades and has expertise in one of the most complicated segments of capital markets. And MMBD is just a product that we believe wholeheartedly is going to grow consistently over the course of the coming years and decades.
