Unlocking Profits in Municipal Funds with a New ETF
If you are looking to maximize profits in the municipal bond space, a new ETF might be just what you need. BondBloxx’s Joanna Gallegos has recently launched the IR+M Tax-Aware Short Duration ETF (TAXX), aiming to provide income opportunities in a high rate environment. This actively managed municipal bond exchange-traded fund offers a unique investment opportunity for investors seeking after-tax income. With a diversified portfolio that includes municipal, corporate, and securitized bonds, TAXX presents a wider opportunity for increased after-tax total returns.
The Driving Force Behind the ETF
- BondBloxx’s Joanna Gallegos launched the IR+M Tax-Aware Short Duration ETF (TAXX) to capture profits in the municipal bond space.
- Gallegos emphasizes the importance of looking beyond traditional municipal bond portfolios and focusing on after-tax income opportunities.
- The ETF offers exposure to municipal, corporate, and securitized bonds, presenting a unique income-generating opportunity in a high rate environment.
- TAXX aims to provide a tax-efficient approach to investing, balancing strong after-tax income opportunities with capital preservation.
The Investment Strategy
- Almost 62% of TAXX’s holdings are in municipal bonds, with the five largest muni holdings by state including Illinois, Pennsylvania, New Jersey, New York, and Alabama.
- The ETF also includes exposure to corporate and securitized bonds, offering a mixed-bond approach to enhance after-tax total returns.
- FactSet describes TAXX as “tax efficient,” highlighting the fund’s ability to generate strong after-tax income while preserving capital.
- With a tax-equivalent yield close to 6%, TAXX presents a compelling investment opportunity for investors looking to optimize their after-tax returns.
Performance and Outlook
- Since its launch on March 14, TAXX has experienced a slight decline of 0.2%, showcasing its performance in a volatile market environment.
- Gallegos remains optimistic about the fund’s future performance, expecting healthy returns even if the Federal Reserve decides to cut interest rates.
- TAXX’s unique investment strategy and diversified portfolio position it well to capitalize on income opportunities in the municipal bond space.
Hot Take: Maximizing Returns with TAXX
When it comes to optimizing your investment portfolio for after-tax income, the IR+M Tax-Aware Short Duration ETF (TAXX) offers a compelling opportunity to generate profits in the municipal bond space. With a focus on tax efficiency and a diversified portfolio that includes municipal, corporate, and securitized bonds, TAXX presents a unique income-generating strategy for investors looking to maximize their returns. Despite fluctuations in the market, TAXX’s performance outlook remains positive, making it a promising investment option for those seeking after-tax income opportunities.
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