New York Life Investment Management is broadening its reach into the exchange-traded fund arena with a new fund that seeks municipal bonds and tax-exempt income. The NYLIM MacKay Muni High Income ETF, which trades under the ticker MMHI, aims at investors looking for a high degree of current income, but are also first and foremost interested in municipal debt securities that offer income exempt from the more typical federal income tax.
The new ETF was filed for listing on NYSE Arca in September 2026, inaugurating yet another product in NYL IM’s expanding active ETF lineup. The fund will be managed by MacKay Shields as investment subadvisor, offering the firm’s municipal bond experience in a vehicle that will be traded like any ETF during the trading day.
Municipal bonds are a key thing of the U.S. fixed income universe as they are issued by states cities public authorities and other governmental entities to finance projects and services, which benefit the public. Depending upon the security and an investors’ own situation, interest from certain investments in municipal bonds may be subject to favorable federal tax treatment. That is the feature that is integral to this fund’s investment purpose.
As set forth in the fund’s prospectus, the NYLIM MacKay Muni High Income ETF generally at least 80% of the fund ‘s assets will be invested in municipal debt securities about, which interest is excludable from gross income for federal income tax purposes.’ But, the fund may also, to a limited extent, invest in securities whose interest is potentially subject to the federal alternative minimum tax; as a result the tax implications of particular holdings may differ.
The “high income” designation is a mostly relevant element. Unlike a typical municipal bond fund that invests much in investment-grade securities, the high-income strategy is aiming for a higher level of current income as the primary focus. This can cause increased credit and market risk, so the higher income goal isn’t totally without concern for fluctuation in value.
Another advantage of the ETF structure is that it offers investors with an alternative route into municipal bonds. Investors can buy shares in the fund on an exchange directly, rather than buying individual bonds and holding them in their own portfolios. The market value of those shares can fluctuate around the funds net asset value and investors can lose money. The funds prospectus clearly states that it is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or another government agency.
MacKay Shields, a subadvisor, conducts the day-to-day management of the fund. As of June30 2026 the firm had assets of $162.2 billion, as per the regulatory filing. It will provide the new ETF with access to a team experienced in municipal fixed-income markets.
May also be timely as actively managed municipal ETFs have started to attract the focus of asset managers. For example, New York Life Investment Management recently added to its municipal ETF line up with the launch of the NYLI MacKay Muni Allocation ETF, which invests mainly in a long duration portfolio of investment grade municipal securities plus a strategic exposure to high-yield municipals.