Goldman Sachs Municipal Income ETF (GMUB) highlighted as an active, low-cost muni bond option during tax season

VettaFi’s Head of Research Todd Rosenbluth discussed the Goldman Sachs Municipal Income ETF (GMUB) with Chuck Jaffe of Money Life, focusing on why the fund is drawing attention during tax season and how its active municipal-bond strategy fits into investors’ fixed-income portfolios.

Why GMUB is getting attention now

Rosenbluth said municipal-bond strategies tend to see a “unique appeal” during tax season, noting that municipal bond strategies often perform well after tax season. He also pointed to broader demand for fixed income—particularly actively managed fixed income ETFs—as a tailwind for the segment.

He described GMUB as an actively managed, broadly diversified municipal income ETF designed to package the scale and experience of Goldman Sachs in a single product.

Demand, credit quality, and supply considerations

On concerns about government divisiveness and the potential impact on municipal projects, Rosenbluth said he does not have enough expertise to comment on the specific bonds inside the ETF or on supply at the individual bond level. However, he cited what he is seeing in the market: strong demand for municipal bond ETFs in March and overall demand for fixed income and actively managed fixed income ETFs.

Rosenbluth also argued that municipal bonds generally offer higher credit quality than corporate bond alternatives, with more AAA and AA exposure typically found in municipal bond ETFs. He added that because GMUB is broadly diversified (not state-specific) and actively managed, the management team can evaluate both primary issuance and the secondary market to find opportunities across the municipal bond universe.

Costs, fund size, and track record

Jaffe asked about expenses, and Rosenbluth said GMUB’s fee is 18 basis points. He noted the fund is relatively new—about 18 to 24 months old—and has approximately $250 million in assets, which he said is large enough to reach meaningful viability thresholds while still being relatively small.

Rosenbluth said GMUB has outperformed index-based strategies since it launched, and he referenced Morningstar rankings to support the fund’s performance.

Yield and performance metrics

Rosenbluth said Morningstar data showed GMUB in the top decile over the last calendar year, and that it was also in the top decile of its Morningstar peer group so far in the current calendar year.

He highlighted the fund’s yield characteristics, stating that the tax-free yield is around 3.5% and the tax-equivalent yield is over 5%. He added that, for investors, the tax-equivalent framing matters because a national municipal bond ETF generally avoids federal taxes, though state and local taxes may still apply depending on where an investor lives.

How GMUB can fit with other bond holdings

Jaffe asked how GMUB compares with other bond funds, including whether investors should tilt toward municipals if they already hold general bond funds or other municipal ETFs.

Rosenbluth said advisors and investors are increasingly looking at municipal bond ETFs even when they are not solely focused on taxes. He said investors may pair a corporate bond ETF (such as an AGG-like product) with a municipal bond ETF to diversify the sources of bond payments and revenue streams.

He characterized GMUB as fitting in the investment-grade portion of a fixed-income allocation, with some high-yield exposure but “not a lot.” He described it as more of a core or core-plus complement, particularly for investors seeking tax benefits while maintaining a higher-quality municipal profile.

Rosenbluth also suggested that investors who already own a municipal strategy for tax savings might consider adding a second municipal ETF to benefit from different managers’ approaches, and potentially pairing it with strategies that are more shorter-term or higher-yield depending on portfolio goals.