American Century Diversified Municipal Bond ETF (TAXF US) - Investment Proposition

Core Viewpoint - American Century Diversified Municipal Bond ETF (TAXF) offers tax-efficient exposure to the U.S. municipal bond market through an actively managed approach that balances investment-grade and high-yield issuers [1] Investment Strategy - The strategy aims for consistent federally tax-exempt income by dynamically allocating across sectors, states, credit tiers, and structures while managing duration and liquidity to balance rate and credit risks [1] - The portfolio can adjust towards attractive spread opportunities when valuations are favorable and become more defensive during deteriorating credit conditions, aiming to smooth income through prudent diversification [1] Market Characteristics - Municipal bonds generally exhibit interest-rate sensitivity and episodic spread volatility; higher-yield segments can enhance income potential but also increase drawdown risk, particularly during risk-off periods or tightening cycles [1] - High-quality revenue and general obligation bonds tend to provide resilience in the portfolio [1] Use Cases - TAXF can serve as a core tax-aware income component in taxable accounts, a diversification complement to corporate bonds and Treasuries, or a satellite allocation to improve after-tax yield [1] - Suitable investors include high-bracket households seeking steady tax-exempt income and multi-asset allocators constructing liability-aware income ladders [1] Risk Consideration - One risk to monitor is exposure to lower-rated or thinly traded issues, where liquidity and price discovery may be challenged in stressed markets [1]