FMNY Profile
The First Trust New York High Income Municipal ETF is designed to provide high income while offering tax advantages to residents of New York State and New York City. Under normal market conditions, the fund allocates at least 80% of its net assets, including any investment borrowings, to municipal debt securities that offer interest income exempt from both federal and New York State and City income taxes. This focus on tax-exempt securities makes it particularly attractive for investors seeking to maximize their after-tax income from municipal bonds.
The ETF invests primarily in a diversified portfolio of municipal bonds issued by entities in New York State and New York City. These bonds include general obligation bonds, revenue bonds, and other types of municipal debt securities that are tax-exempt at both the federal and state levels. While the fund has the flexibility to invest in securities of any duration and maturity, it typically maintains an effective duration of approximately 3 to 9 years, balancing income generation with interest rate risk management.
The fund’s management strategy involves selecting high-income municipal bonds with strong credit quality and attractive yield characteristics. The investment team analyzes various factors including credit ratings, issuer fundamentals, and market conditions to construct a portfolio that aims to deliver high yield while preserving capital. The non-diversified nature of the fund means it may concentrate its investments in a smaller number of securities compared to more broadly diversified funds, potentially enhancing yield but also increasing risk.
Managed by First Trust, the ETF benefits from the firm's expertise in municipal finance and its deep understanding of the New York municipal bond market. First Trust employs a rigorous selection process and leverages its research capabilities to construct a portfolio aligned with the fund’s investment objectives. Investors in the First Trust New York High Income Municipal ETF gain access to a professionally managed, high-yield municipal bond portfolio that seeks to optimize after-tax returns for New York-based investors.
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