The BondBloxx’s Joanna Gallegos has recently launched the IR+M Tax-Aware Short Duration ETF (TAXX), aimed at capturing profits in the municipal funds space. Gallegos believes that in a high-interest rate environment, actively managed municipal bond exchange-traded funds can generate income. Despite potential interest rate cuts by the Federal Reserve, she remains optimistic about healthy returns for the ETF. Nearly 62% of TAXX’s holdings are in municipal bonds, with the five largest muni holdings by state being Illinois, Pennsylvania, New Jersey, New York, and Alabama. The fund also includes exposure to corporate and securitized bonds, offering a wider opportunity for after-tax total returns.
FactSet describes the TAXX fund as “tax efficient,” emphasizing the balance between strong after-tax income opportunities and capital preservation through a mix of municipal and taxable short-duration fixed income securities. Gallegos highlighted the fund’s tax-equivalent yield of almost 6%, making it an attractive option for investors to consider during tax season. Despite only being less than a month old, TAXX has experienced a slight 0.2% decline since its launch date on March 14th.
With expectations of continued success in the municipal bond space, BondBloxx’s Joanna Gallegos is confident in the potential of TAXX to deliver strong returns for investors. By diversifying holdings across municipal, corporate, and securitized bonds, the ETF offers a strategic approach to maximizing after-tax total returns. Gallegos’ emphasis on the importance of considering taxes in investment decisions reflects the fund’s focus on providing tax-efficient income opportunities for investors. While the fund is still in its early stages, the strong tax-equivalent yield and diversified portfolio position TAXX as a promising option for investors seeking income generation in the current market environment.
Despite potential interest rate cuts by the Federal Reserve, BondBloxx’s Joanna Gallegos remains optimistic about the income-generating opportunities presented by actively managed municipal bond exchange-traded funds, such as the IR+M Tax-Aware Short Duration ETF (TAXX). With nearly 62% of the fund’s holdings in municipal bonds, TAXX offers exposure to a diversified mix of bonds including those from states like Illinois, Pennsylvania, New Jersey, New York, and Alabama. The fund’s tax-efficient structure, as described by FactSet, combines strong after-tax income opportunities with capital preservation through short-duration fixed income securities, making it an attractive option for investors looking to maximize returns while managing tax implications.
