ALPS Intermediate Municipal Bond ETF

MNBD

Market cap $42.5M

For what municipal bonds lack in terms of exciting return profiles, the asset class makes up for with other advantages. Those include low volatility, reliable income and a variety of tax advantages that make these bonds appealing to retirees and high-net-worth investors.

For a portion of 2025, municipal bonds scuffled amid concerns about the state of the U.S. economy, a spate of new issuances and lack of clarity from the Federal Reserve on interest rates. Skeptics may assert those issues haven't been fully resolved.

The combination of portfolio diversification and reliable income remains alive and well with municipal bonds and the related ETFs, indicating 2026 could be an ideal time for investors to consider funds such as the ALPS Intermediate Municipal Bond ETF (MNBD).

A variety of asset classes and corners of the equity market have, at various points, worn the “Trump trade” label. Bitcoin has been among the leaders in that clubhouse.

The Federal Reserve recently lowered interest rates for the second time this year. So fixed income investors may be examining longer duration bonds or lower quality debt to try to access higher yields.

Actively managed ETFs, particularly those of the fixed income variety, are among the fastest-growing ETF segments today. That growth has been facilitated in part by advisors moving away from higher-fee mutual funds and issuers converting popular mutual funds to the ETF wrapper, among other factors.

Many fixed income investors are enthusiastic about the bond market's prospects against the backdrop of Federal Reserve easing. But municipal bonds are setting the world ablaze this year.

Risk-averse fixed income investors may be paying renewed attention to municipal bonds amid expectations that the Fed's monetary easing campaign is just getting started. But experienced bond investors know there's more to the story with munis.

Using the ICE AMT-Free US National Municipal Index as the measuring stick, it's fair to say municipal bonds haven't done much of anything from a performance perspective this year. That's despite the fact that aggregate bond indexes have traded higher.

Advisors and ETF industry observers know that one of the fastest-growing segments in ETF Land is at the intersection of active management and fixed income. Whether it's by way of mutual-fund-to-ETF conversions or more new ETFs coming to market, the population of active bond ETFs has swelled in recent years.