ITM ETF Review: Performance, Expense Ratio, Holdings, and Alternative ETFs
A passive ETF tracking an intermediate-term, broad-market municipal bond index exempt from the Alternative Minimum Tax. Notable features include tax efficiency, strong credit quality, and intermediate duration.
SubscribeWhat is this ETF?
It tracks a broad-market municipal bond index exempt from the Alternative Minimum Tax and holds a portfolio of intermediate-duration, U.S. dollar-denominated, tax-exempt municipal bonds maturing in 5 to 17 years.
It is well suited for long-term bond investors seeking tax-exempt interest income in high tax brackets, as well as those looking to enhance the tax efficiency of their portfolios.
It is a passive (index-tracking) ETF launched by VanEck in 2007.
How does it work?
| Item | Details |
|---|---|
| Tracked Index | ICE Intermediate AMT-Free Broad National Municipal Index |
| Management Style | Passive (index tracking) |
| Maturity Range | Intermediate (5–17 years) |
| Dividend Frequency | Monthly |
| Total Expense Ratio | 0.18% |
It passively tracks U.S. broad-market, tax-exempt municipal bonds excluded from the Alternative Minimum Tax, within the intermediate maturity range. The portfolio is concentrated in high-credit-quality bonds, and interest income is exempt from federal tax, resulting in strong tax efficiency.
- Excludes AMT-applicable bonds, improving after-tax returns for high-bracket investors
- The intermediate maturity range balances higher interest income versus short-term bonds and lower rate sensitivity versus long-term bonds
Size and Cost
Assets under management (AUM) stand at $2.0B, with a total expense ratio of 0.18% per year.
In the same municipal bond category, MUB is a large-cap ETF covering a broader maturity spectrum, while VTEB is distinguished by its lower expense ratio. ITM's differentiating factor is its focus on the intermediate maturity range.
Performance and Flows
1-Year Price Performance
Dividend & Yield
52-Week Price RangeThe municipal bond market is highly sensitive to interest rate movements, and rising-rate environments put downward pressure on bond prices. Due to its intermediate duration, the impact of rate-hike shocks tends to be somewhat milder compared with long-duration municipal bonds.
Demand from high-income investors prioritizing tax efficiency supports fund flows into municipal bond ETFs. Inflows and outflows tend to be most pronounced around year-end tax-selling demand and the start-of-year portfolio rebalancing window.
Strengths and Weaknesses
Tax-exempt interest income and strong credit quality are the strengths, while bond price risk from interest rate movements and relatively lower liquidity are the drawbacks.
💪 Key Strengths
⚠️ Things to Watch
Alternative ETFs and Related Products
Comparison candidates within the same intermediate municipal bond category include MUNI, MMIT, and VTEI shown in the table, which differ in maturity range, issuer, and expense ratio. Broader alternatives spanning the entire municipal bond market include iShares' MUB and Vanguard's VTEB, both characterized by large AUM and low expense ratios. Investors seeking higher-yield muni exposure may also consider HYD, extending to longer maturities with MLN, or shortening maturities with TFI.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 MUNI | PIMCO Intermediate Municipal Bond Active ETF | $49.81 | -0.3% | $3.0B | 0.35% | 3.45% | -4.7% |
 BKMI | BNY Mellon Municipal Intermediate ETF | $24.89 | -0.4% | $1.6B | 0.35% | 1.93% | - |
 VTEI | Vanguard Intermediate-Term Tax-Exempt Bond ETF | $95.35 | -0.4% | $1.6B | 0.08% | 3.27% | -4.9% |
 MMIT | NYLIM MacKay Muni Intermediate ETF | $23.02 | -0.5% | $1.4B | 0.30% | 3.81% | -5.0% |
 NYM | AB New York Intermediate Municipal ETF | $24.10 | -0.2% | $1.3B | 0.27% | 2.55% | - |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 NJR | New Jersey Resources Corp | 0.00% | $50.61 | -0.9% | $5.1B | 14.0 | 3.8% |
| NJR | New Jersey Resources Corp | 0.00% | $50.61 | -0.9% | $5.1B | 14.0 | 3.8% |
 NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NYT | New York Times Co | 0.00% | $63.83 | +1.2% | $10.3B | 26.6 | 1.42% |
| NJR | New Jersey Resources Corp | 0.00% | $50.61 | -0.9% | $5.1B | 14.0 | 3.8% |
| NJR | New Jersey Resources Corp | 0.00% | $50.61 | -0.9% | $5.1B | 14.0 | 3.8% |
Investor Checklist
We have compiled key items to review before investing in ITM. Eligibility for the tax benefit, the interest rate environment, and the type of account held directly affect actual investment outcomes.
| Check Item | What to Confirm | Current Status |
|---|---|---|
| 💵 Tax Environment | Whether you hold a taxable account and which federal income tax bracket you fall into | Taxable account required |
| 📈 Rate Direction | Aware of bond price decline risk in a rising-rate environment | Needs review |
| 💧 Liquidity | Average daily trading volume and bid-ask spread levels | Mid-tier |
| 📊 Duration | Balance with the duration of your overall portfolio | Intermediate range |
Rising rates can push bond prices lower and offset interest income, and credit risk may also emerge if the fiscal conditions of municipal issuers deteriorate. The tax-exemption benefit delivers real value only in taxable accounts.
It is a useful option for high-bracket investors seeking tax-exempt interest income in a taxable account. If minimizing expense ratio is the top priority, VTEB is an alternative; if broader maturity diversification is needed, MUB is a comparison candidate.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
Today's 5 AI picks, all free