MMCA Profile
IQ MacKay California Municipal Intermediate ETF is designed to provide investors with income that is exempt from federal and California state income taxes by focusing on municipal bonds. Under normal market conditions, the fund invests at least 80% of its assets, including any borrowings for investment purposes, in municipal bonds whose interest is exempt from federal and California income taxes. This strategy is particularly beneficial for investors seeking tax-advantaged income and residing in California.
The fund maintains a portfolio with a modified duration to worst typically ranging from 3 to 8 years. Duration measures the sensitivity of a bond's price to changes in interest rates, and by managing its duration within this range, the fund aims to balance interest rate risk while seeking stable income. This approach helps the fund to potentially mitigate the impact of interest rate fluctuations on its portfolio value, providing a degree of stability in varying interest rate environments.
In addition to its core holdings in tax-exempt municipal bonds, the fund may allocate up to 20% of its net assets to municipal bonds that are subject to federal alternative minimum tax (AMT) and bonds that pay interest subject to federal and/or California income taxes. This flexibility allows the fund to explore opportunities in bonds with varying tax characteristics, potentially enhancing income while managing tax implications.
IQ MacKay California Municipal Intermediate ETF leverages the expertise of its managers to select a diversified portfolio of municipal bonds with the aim of delivering attractive, tax-exempt income to investors. The fund’s focus on California municipal bonds aligns with its goal of providing income that is both federally and state tax-advantaged, making it a suitable choice for California residents seeking to optimize their after-tax returns. By strategically managing duration and selectively including certain taxable bonds, the fund seeks to achieve a balanced and efficient investment approach.
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