IQ MacKay California Mncpl Intmdt ETF’s Process Pillar rating is Average, but a strong management team still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns a High People Pillar rating. The strategy gets an Average Process Pillar rating.  The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic evaluation of this fund's process seeks to understand whether the strategy has a performance objective and sensible, repeatable execution. IQ MacKay California Mncpl Intmdt ETF earns an Average Process Pillar rating.    The predominant contributor to the rating is the firm's five-year retention rate of 87% over the period. The size of the portfolio management team also reinforces the process. With four portfolio managers, the fund is reasonably well-resourced. Lastly, the process is limited by its parent firm's inferior risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.8 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 Compared with other funds in the Muni California Intermediate Morningstar Category, this fund, historically, hews closely to peers' credit and interest-rate sensitivity over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the average strategy in the category, the managers have been overweight AAA rated bonds in recent years. In the latest month, the strategy has relatively overweighted AAA rated bonds compared with its peers as well. Additionally, there's been a bias away from debt with 20- to 30-year maturities over the past few years. Similarly, in recent months, the strategy also had less exposure to debt with 20- to 30-year maturities than peers. Finally, during the past few years, the fund leaned towards cash. In this month, the strategy also leaned more towards cash compared with its peers.

 This strategy's 12-month yield is 3.6%, higher than its average peer's 2.6%. It also has a 3.1% 30-day SEC yield (a measure similar to yield-to-maturity). While a higher yield may deliver more income, it also tends to indicate higher credit risk. The portfolio has a lower average surveyed credit quality of BBB, compared with the typical peers' A and its non-investment-grade stake is 9% of assets, compared to its peers' 1%. Lower quality bonds have higher yields but come with more risk.

Average

Process

IQ MacKay California Mncpl Intmdt ETF earns a High People Pillar rating. Michael Petty, the longest-tenured manager on the strategy, provides strong guidance, bringing forward over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 3.8 stars, demonstrating above-average risk-adjusted performance relative to category peers. Michael Petty is supported by an experienced team, being able to draw on three additional listed managers, who average 22 years of listed portfolio management experience.  The highest personal investment by any of the strategy's managers is between $10,000 and $50,000. That is too low to promote alignment of their interests with the fund's investors.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

High

People

New York Life Investments' collection of autonomous investment boutiques will have a new leader in May 2023, and it will take time to assess his impact. The firm keeps its Average Parent rating.
New York Life, the insurance giant that owns NYL Investments, tapped Naïm Abou-Jaoudé to be the asset manager's CEO after the previous CEO departed. Abou-Jaoudé inherits a firm that has grown by building internally and through acquisition. The firm offers mandates in partnership with 13 different asset managers--eight of which are wholly or partially owned affiliates – through several global outlets. Most U.S. funds fall under the established MainStay brand, whereas IndexIQ oversees a growing lineup of ETFs managed both internally and by other affiliates. Candriam, at which Abou-Jaoudé has been CEO even prior to its 2014 acquisition by NYL Investments, takes the lead in Europe through its own offerings and through those subadvised by other boutiques.
Plenty of these capabilities are compelling, with Candriam and fellow affiliates MacKay Shields and Ausbil sporting standout teams in several wheelhouses. Yet many of the boutiques have also struggled with managing bloated lineups or with improving lagging teams. NYL Investments hasn't shied from changing subadvisors or merging platforms and doesn't have a spotless record of managing capacity or of avoiding trendy offerings.

Parent

IQ Mackay California Municipal Intermediate ETF

MMCA is an actively managed fund that invests primarily in investment-grade, intermediate-term municipal bonds that are exempt from federal and California income taxes.

On Tuesday, IndexIQ, a leading provider of innovative investment solutions, announced the launch of the IQ MacKay California Municipal Intermediate ETF (MMCA), the latest addition to the firm's fast-growing suite of municipal bond ETF offerings. MMCA is actively managed by subadvisor MacKay Municipal Managers™, the municipal bond team at MacKay Shields LLC, led by co-CIOs [.

IndexIQ Launches California Municipal Intermediate ETF, MMCA

NEW YORK--(BUSINESS WIRE)--IndexIQ has launched MMCA, focused on California munis, actively managed by MacKay Municipal Managers, the municipal bond team at MacKay Shields LLC

News for IQ Mackay California Municipal Intermediate ETF ETF (MMCA)