Rockefeller Asset Management is the latest money manager to capitalize on the muni ETF boom.
The New York-based division of Rockefeller Capital Management is launching its first actively managed fixed income exchange-traded funds. The products, which will be managed by a trio of portfolio managers who joined earlier this year from Invesco Ltd., will focus on lower-rated bonds.
There are now more than 100 muni ETFs with a combined $131 billion as asset managers vie to capture money that’s been flowing into the low-cost and easy-to-trade products. Goldman Sachs Asset Management and PGIM have both launched new funds this year.
Demand has been particularly strong for high-yield muni bonds. The securities are outperforming even US corporate high-yield bonds so far this year, returning over 6%, according to Bloomberg indexes.
“We believe higher-yielding municipals represent a really compelling asset class,” said Alex Petrone, director of fixed income at Rockefeller Asset Management. She said the securities have a low correlation with equities, which means that they could provide a buffer for investors when there is weakness in the stock market.
Scott Cottier, Mark DeMitry, and Michael Camarella, who previously helped oversee high-yield muni funds at Invesco, will manage the funds.
The Rockefeller Opportunistic Municipal Bond ETF, which will trade with the ticker RMOP, will typically invest at least 50% of its total assets in municipal bonds that have a credit rating of BBB+ or Baa1 or lower.
The company is also launching the Rockefeller California Municipal Bond ETF and the Rockefeller New York Municipal Bond ETF, which will invest in tax-exempt bonds in those states. These funds likely appeal to investors looking to shield their income from high state taxes.
Those two funds can invest up to 25% of their assets in muni bonds that are below investment-grade.
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