MANKX
BlackRock NY Municipal Opportunity-Inst
Tax-Exempt Income for New York Investors
The BlackRock NY Municipal Opportunity-Inst (MANKX) is designed to provide investors with a high level of income that is exempt from federal, New York State, and New York City income taxes. This makes it particularly attractive for residents of New York who are in higher tax brackets and looking to maximize their after-tax income. The fund primarily invests in a diversified portfolio of long-term obligations issued by or on behalf of New York State and its political subdivisions, agencies, and instrumentalities. This focus on municipal bonds not only provides tax advantages but also supports local infrastructure and development projects.
At A Glance
Executive Summary
MANKX offers a 3.33% yield with tax-exempt income, outperforming its benchmark with a 1-year return of 8.92%.
High tax-exempt yield of 3.33%. Strong 1-year return of 8.92%. Diversified NY municipal bond exposure.
Higher expense ratio at 0.71%. Limited sector diversification. Potential interest rate sensitivity.
Impressive Recent Performance
MANKX has demonstrated strong performance over the past year, with a 1-year return of 8.92%, significantly outperforming its benchmark, the BBG Muni USD Index, which returned 7.51% over the same period. This performance is indicative of the fund’s effective management and strategic allocation within the municipal bond sector. The fund’s ability to deliver such returns while maintaining a relatively low standard deviation of 1.14% highlights its potential for providing stable, tax-exempt income to investors. This performance is particularly noteworthy given the challenging interest rate environment that has affected many fixed-income securities.
Portfolio Composition and Top Holdings
The fund’s portfolio is heavily weighted towards municipal bonds, with 94.38% of its assets allocated to this sector. This focus is reflected in its top holdings, which include significant investments in New York-based municipal projects such as the New York Transportation Development Corporation and the Triborough Bridge & Tunnel Authority. The fund also maintains a small cash position of 4.53%, which provides liquidity and flexibility to respond to market changes. The top holdings are diversified across various municipal projects, which helps mitigate risk and provides a stable income stream.
Risk Metrics and Volatility
MANKX exhibits a relatively low level of volatility, with a standard deviation of 1.14% and a beta of 1.17, indicating that it is slightly more volatile than the market. However, its alpha of 1.41% suggests that the fund has been able to generate returns above its expected performance, given its risk level. The fund’s Sharpe ratio of 0.36 and Treynor ratio of 1.20 further illustrate its ability to provide risk-adjusted returns. The fund’s downside risk, measured by its downside risk (UI) of 0.89, is relatively low, indicating that it has been able to protect capital during market downturns.
Comparative Analysis with Similar Funds
When compared to similar funds, MANKX stands out with its strong 1-year return of 8.92% and a yield of 3.33%. While its expense ratio of 0.71% is higher than some peers, such as the Invesco CA Limited-Term Municipal-Y (OLCYX) with an expense ratio of 0.68%, MANKX’s performance justifies the cost. Other similar funds, like the Franklin High-Yield Tax-Free Income-A1 (FRHIX), offer higher yields but come with increased risk, as indicated by their higher beta values. MANKX’s focus on New York municipal bonds provides a unique advantage for investors seeking state-specific tax benefits.
Expense Ratio and Cost Considerations
The expense ratio of MANKX is 0.71%, which is relatively high compared to some other municipal bond funds. However, this cost is offset by the fund’s strong performance and tax-exempt income benefits. Investors should consider whether the higher expense ratio is justified by the fund’s ability to deliver superior returns and tax advantages. For those in higher tax brackets, the tax savings may outweigh the cost of the expense ratio, making MANKX a cost-effective option for achieving tax-exempt income.
Suitability for Risk-Averse Investors
MANKX is well-suited for risk-averse investors who are seeking stable, tax-exempt income. The fund’s focus on high-quality municipal bonds and its strong performance metrics make it an attractive option for those looking to preserve capital while generating income. Its low volatility and downside risk further enhance its appeal to conservative investors. Additionally, the fund’s emphasis on New York municipal bonds provides a unique opportunity for state residents to benefit from tax savings, making it a compelling choice for those in higher tax brackets.
Conclusion: A Strategic Choice for New York Residents
In conclusion, the BlackRock NY Municipal Opportunity-Inst (MANKX) offers a compelling investment opportunity for New York residents seeking tax-exempt income. Its strong performance, high yield, and focus on municipal bonds make it a standout choice in the Muni Long Term category. While the expense ratio is higher than some peers, the fund’s ability to deliver superior returns and tax benefits justifies the cost. MANKX is particularly well-suited for risk-averse investors in higher tax brackets who are looking to maximize their after-tax income while supporting local infrastructure projects.
Similar Securities
SHMMX: Western Asset Managed Municipals-A | Tax-Exempt Income Fund
SHMMX offers a 3.32% yield with a focus on tax-exempt income, boasting a high correlation with its benchmark and a competitive expense ratio.
TAFTX: American Funds Tax-Exempt Fund of CA-A | Tax-Free Income Investment
TAFTX offers tax-free income with a 2.88% yield, focusing on California municipal bonds. It has a competitive expense ratio of 0.57%.
OPCAX: Invesco CA Muni-A | Tax-Exempt Income for California Investors
OPCAX offers a 3.80% yield with tax-exempt income, focusing on California municipal bonds. It has a high correlation with its benchmark and a 1.18% expense ratio.
PRTAX: TRPrice Tax-Free Income-Inv | Tax-Exempt Income from Municipal Bonds
PRTAX offers a 3.28% yield with a focus on long-term municipal bonds, providing tax-exempt income and a competitive expense ratio of 0.53%.
FCOZX: Franklin CO Tax-Free Income-Adv | Tax-Free Income for Colorado Investors
FCOZX offers tax-free income with a 3.22% yield and a competitive 0.6% expense ratio, ideal for Colorado residents seeking municipal bond exposure.
Futher Reading
https://www.morningstar.com/funds/xnas/MANKX/quote
https://finance.yahoo.com/quote/MANKX/”>Yahoo: BlackRock NY Municipal Opportunity-Inst
https://ftcloud.fasttrack.net/web/chart/MANKX
https://www.wsj.com/market-data/quotes/mutualfund/MANKX
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