Three Things to Consider When Connecting ETFs to the Muni World

Marcus Mattielli


Marcus Mattielli shares his insights on the growing interest in municipal ETFs among large, institutional investors and the opportunities for increased growth and profitability.

As we’ve seen the marketplace evolve, we’re continuing to work with large institutional clients and are seeing a lot of interest in fixed income ETFs, which also include municipal ETFs. We believe there are a number of reasons for this interest.

First, investors have a need for new sources of liquidity. This need for liquidity has helped drive the expansion of fixed income and municipal ETFs broadly within institutional business lines and portfolios alike.

Second, ETFs allow investors to trade in and out of positions throughout the day – a unique and defining characteristic of the ETF, which is unlike a mutual fund because they trade like a stock on an exchange. This flexibility to trade in and out allows investors who want the ability to react to market movements in real-time that convenience.

Finally, among fixed income ETFs in the U.S., according to the MSRB, approximately 6% of bond ETFs are invested in municipals. While 6% may not seem like much, municipal ETFs have shown tremendous growth in recent years, outpacing the average growth among all fixed income ETFs.

At BNY Mellon’s Pershing, our clients benefit from our deep pool of experience working with firms across the municipal space – whether it’s large institutions, hedge funds, or our independent advisor clients.

Published by The Bond Buyer, July 18, 2019

Marcus Mattielli

Marcus Mattielli

Marcus Mattielli is a Director and Senior Relationship Manager for the Global Client Relationship group at BNY Mellon’s Pershing. Marcus is responsible for the overall management of introducing broker-dealer relationships for Pershing, with a focus on institutional broker-dealers.