MNBD ETF

It's hard to see the words “municipal bonds” and get excited, but times may be changing. With fixed income wrapping up a strong year, many investors may also be looking to refresh portfolios and adjust for tax impacts ahead of 2025.

Advisors and investors evaluating areas of 2025 opportunity in the fixed income market might do well to consider muni bonds and the related ETFs. That thesis could be bolstered with the benefits of active management, accessible via the ALPS Intermediate Municipal Bond ETF (MNBD).

2025 is right around the corner. Advisors and investors are evaluating which asset classes could deliver the goods in the new year.

It's not yet clear who will occupy the White House in 2025. It's also not known what the makeup of the two chambers  of Congress will look like.

Municipal bonds and related ETFs aren't the most adventurous fixed income assets. That's usually why income investors, including retirees, embrace the asset class.

The Federal Reserve nearing its first interest rate cut since 2020. So enthusiasm for fixed income assets is increasing, and muni bonds are part of that trend.

In terms of population, the universe of actively managed municipal bond exchange traded funds is growing at a prodigious pace. That makes sense because there are multiple reasons why the combination of municipal bonds and active management can reward investors.

Broad measures of investment-grade municipal bonds didn't do much of anything in the first half of 2024. However, some market observers believe the asset class could be poised for some upside as the second half unfolds.

As measured by the widely followed ICE AMT-Free US National Municipal Index, muni bonds are sporting modest losses over the past month and on a year-to-date basis. However, it's not all bad news when it comes to municipal debt.