Staying Agile with State-Focused, Research-Driven Muni ETFs
Key Takeaways
- In a fragmented municipal bond market where municipal bond yields remain elevated and credit dynamics are shifting, active management matters more than ever.
- AB’s actively managed municipal bond strategies have the agility to capitalize on market inefficiencies, identify resilient credits and manage yield curve exposures dynamically.
- The AB California Intermediate Municipal ETF (NYSE: CAM) and AB New York Intermediate Municipal ETF (NYSE: NYM), are designed to deliver tax-efficient income while managing duration and credit risk in two of the nation’s largest state markets.
Why Active Management Still Matters in Municipal Bonds
There’s a structural reality with municipal bond markets: they’re fragmented, inefficient and nuanced. With more than 50,000 issuers and uneven liquidity, active management has the potential to uncover value that passive strategies often miss, while avoiding pitfalls that broad passive indices can’t
- Dynamic Yield-Curve Management: Active managers have the ability to tactically adjust exposures as interest rates and the yield curve evolve, helping portfolios capture opportunities and avoid areas that may drag on performance.
- Capitalizing on Market Inefficiency: Many municipal bonds trade infrequently, creating pricing dislocations and attractive entry points for skilled active managers.
- Distinguishing Resilient Issuers from Struggling Ones: State and local fundamentals vary a lot—active, in-depth credit analysis helps separate resilient issuers and avoid those likely to underperform in periods of stress.
Municipal Fundamentals Remain Generally Solid
Municipal credit fundamentals remain generally solid despite fiscal headwinds. State and local governments have entered this cycle from a position of strength, bolstered by strong tax receipts, federal aid buffers and prudent financial management.
Even with potential shifts in federal policy, most municipal balance sheets are robust. Well-managed issuers have built up reserves and diversified their revenue sources, helping position them to absorb funding volatility. This resilience supports the segment that both CAM and NYM target, offering durable income with moderate duration risk.
Staying Agile in a Changing Interest-Rate Environment
The recent rise in yields has created an attractive entry point for investors seeking long-term, tax-exempt income. But the changing dynamics of interest rates and the yield curve will likely make the path forward uneven. That favors strategies with the agility to reposition exposures across sectors and durations. The active management of the AB California Intermediate Municipal ETF (CAM) and AB New York Municipal ETF (NYM) enables them to:
- Adjust duration positioning dynamically as the Fed cycle evolves
- Target relative value within each state’s diverse credit landscape that seeks to provide income exempt from taxes at both the federal and state levels
The result: portfolios built for resiliency and income efficiency through changing market cycles, with the potential to deliver attractive taxable-equivalent yields (Display).
CAM and NYM: Higher Yields, Lower Risk
Attractive tax-equivalent yields with strong long-term credit quality
Past performance does not guarantee future results.
Tax rate assumptions uses a 40.8% Federal tax rate, 13.3% and 10.9% CA/NY taxes rate. NYM converted to an ETF on 11/7/25. Showing after-tax returns for ANIYX as of 10/31/25. Funds adjusted for national exposure outside of state specific mandate. IG Corp represented by Bloomberg Corporate Index. Corp HY represented by Bloomberg Corporate High Yield Index. Money Market represented by the average yield in the Morningstar Taxable Money Market product category.
As of October 31, 2025
Source: Bloomberg, Moody’s, Morningstar and AB
CAM and NYM: State-Focused Solutions for Tax-Aware Investors
With municipal bond yields near multi-year highs and credit fundamentals still sound, investors have a rare opportunity to lock in attractive after-tax income. But there’s a difference between owning the market and capturing its best opportunities.
That's where AB California Intermediate Municipal ETF (NYSE: CAM) and AB New York Intermediate Municipal ETF (NYSE: NYM) come in. Their disciplined active-management process includes dynamic duration positioning and in-depth credit research, supported by dedicated municipal analysts covering the entire municipal landscape. These state-specific municipal exchange-traded funds (ETFs) bring an active advantage in a tax-efficient vehicle, helping investors stay agile and income-focused.
How to Take Action
Investing in securities involves risk, and there is no guarantee of principal.
Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit our Literature Center or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.
Credit Risk: A bond’s credit rating reflects the issuer’s ability to make timely payments of interest or principal—the lower the rating, the higher the risk of default. If the issuer’s financial strength deteriorates, the issuer’s rating may be lowered, and the bond’s value may decline. Derivatives Risk: Derivatives may be more sensitive to changes in market conditions and may amplify risks. Duration Risk: Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise. Illiquid Investment Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Fund. Inflation Risk: Prices for goods and services tend to rise over time, which may erode the purchasing power of investments. Interest-Rate Risk: As interest rates rise, bond prices fall and vice versa, long-term securities tend to rise and fall more than short-term securities. Leverage Risk: Trying to enhance investment returns by borrowing money or using other leverage transactions such as reverser purchase agreements magnifies both gains and losses, resulting in greater volatility. Market Risk: The market values of the portfolio’s holdings rise and fall from day to day, so investments may lose value. Municipal Market Risk: Economic conditions, political or legislative changes, public health crises, uncertainties related to the tax status of municipal securities, or the rights of investors in these securities may negatively impact the yield or value of a municipal security. Non-Diversification Risk: The Fund may have more risk because it is “non-diversified” meaning that it can invest more of its assets in a smaller number of issuers. Accordingly, changes in the value of a single security may have a more significant effect, either negative or positive, on the Fund’s net asset value. Tax Risk: The US Government and the US Congress may periodically consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Fund by increasing taxes on that income.
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