Mairs & Power announced the launch today of its first exchange traded fund. The Minnesota Municipal Bond ETF (ticker MINN) is the only ETF invested primarily in Minnesota Municipal Bonds in the country. The fund will be traded on the Chicago Board Options Exchange (CBOE) and can be purchased through an online broker or through your financial advisor.
“We believe this ETF presents a distinct opportunity for investors, particularly Minnesota residents, who are looking to add fixed income to their portfolios,” said Mark Henneman, CEO. “Unlike most ETFs, our fund is actively managed. This means we are constantly evaluating and making decisions about the securities in the portfolio. Instead of being required to buy only what is in an index, our goal is to produce returns and income that exceed rather than mirror an index.”
Municipal bonds are among the lowest risk securities among stocks and bonds. In particular, Minnesota municipal bond issues have historically demonstrated high credit quality. Minnesota residents receive a double tax-exemption: dividends, which are to be paid monthly, will be both federal and state tax exempt.
Shareholders gain exposure to many municipal bonds through just one vehicle. In addition, the fund is designed to provide monthly income distributions. It has a low expense ratio and a low initial investment minimum.
As an ETF, MINN will be traded throughout the day like an ordinary stock, and can be easily bought and sold. It will disclose the price and holdings daily. Like many ETFs, MINN has no sales fees; management fees and operating expenses still apply. The broker may charge a fee similar to the fee to purchase a stock or other security.
“Through this ETF, individuals and organizations have the opportunity to invest in the future of Minnesota,” said Brent S. Miller, CFA, lead portfolio manager. “MINN provides the opportunity to invest in the future of your local Minnesota community. Investors will be providing funds that could be used to build schools, water treatment plants, airports, courthouses, green energy projects, and various other investments we need for Minnesota to be a leader in the 21st century and beyond.” Typically, municipal bonds are issued by state, city, county and other government entities to finance capital projects.
Mairs & Power has focused its investing in Minnesota and the upper Midwest since its founding in 1931. MINN offers an opportunity to invest responsibly in Minnesota to help it continue to prosper and provide a high quality of life for its residents.
The investment team includes Miller, Robert W. Thompson, CFA, CIC, co-manager, and Heidi J. Lynch, fixed income trader and assistant portfolio manager. Each has significant experience in fixed income analysis.
About Mairs & Power
Established in 1931, Mairs & Power is an independent, employee‐owned investment advisory firm committed to pursuing long‐term growth. The firm’s mutual funds, ETF and individually managed accounts are built on the strength and success of carefully selected, quality stocks and bonds. One of the cornerstones of the firm’s equity approach is its regional strategy focusing on stocks of companies headquartered in Minnesota and the Upper Midwest. Mairs & Power manages mutual funds, individually managed portfolios and now an ETF. As of December 31, 2020, Mairs & Power’s assets under management totaled $10.6 billion.
All investments have risks.
Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Because the Fund invests substantially in Minnesota municipal instruments, it is more exposed to the impact of negative political, economic and legislative factors within Minnesota than a fund that invests more widely. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. The fund is also subject to risks associated with investments in the municipal bond market, municipal mortgage back securities, and other investment companies. The Fund is a recently organized, management investment company with no operating history. As a result, prospective investors have a limited track record on which to base their investment decision. There is also a risk that the Fund will not grow to or maintain an economically viable size, in which case it could ultimately liquidate without shareholder approval.
The fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Although the Fund is exempt from federal tax, you may owe taxes on any capital gains realized through the fund’s trading or through your own redemption of shares. For some investors, a portion of the fund’s income may be subject to state and local taxes. Monthly income distributions are not guaranteed.