MLN ETF: Question & Answer

• What are long-duration municipal bonds, and how big is the municipal bond market?
• What makes long-term municipal bonds attractive relative to other types of bonds?
• What is the VanEck Long Muni ETF (MLN)?
• How is the Fund’s index constructed?
• Why might investors be interested in long-term municipal bonds?
• How do long-term munis compare in the risk/reward profile?
• How do changing interest rate expectations impact long-term muni performance?
• Can long-term munis play a role in retirement income planning?
• How does the portfolio management team decide which bonds in the index to own?
• How can investors buy the VanEck Long Muni ETF (MLN)?

What are long-duration municipal bonds, and how big is the municipal bond market?

Long-duration municipal bonds are debt securities issued by states, municipalities, and other local governments with investment-grade credit ratings (BBB-/Baa3 or higher) and maturities at the long end of the investment-grade municipal yield curve.

They are used to finance major infrastructure and public benefit projects such as transportation systems, water and sewer facilities, schools, and healthcare institutions.

As of 6/30/2025, the overall U.S. municipal bond market totaled roughly $4.3 trillion in outstanding debt, according to SIFMA. Long-term maturities represent a substantial portion of that market, often appealing to investors seeking stable, tax-exempt income with higher yield potential compared to shorter maturities.

What makes long-term municipal bonds attractive relative to other types of bonds?

• Higher Income Potential: Long-duration municipal bonds typically offer higher yields than short- or intermediate-term bonds, compensating investors for locking in capital over a longer horizon.
• Tax-Exempt Income: Interest income from municipal bonds is exempt from federal income tax and may also be exempt from state and local taxes, depending on the investor’s residence.
• Credit Strength: Investment-grade municipals have historically exhibited very low default rates compared to other fixed income sectors, including corporates.
• Portfolio Diversification: Long-term municipals may provide balance to portfolios by offering both income stability and potential price appreciation if interest rates decline.

What is the VanEck Long Muni ETF (MLN)?

The VanEck Long Muni ETF (MLN) seeks to track the performance of the ICE Long AMT-Free Broad National Municipal Index (MBNL), which measures the U.S. dollar-denominated, long-maturity (17 years and longer), investment-grade, tax-exempt bond market. The fund provides diversified exposure to high-quality municipal issuers across the United States, targeting income and total return opportunities at the long end of the yield curve. Dividends are distributed to shareholders monthly, and capital gains are distributed on an annual basis.

How is the Fund’s index constructed?

The ICE Long AMT-Free Broad National Municipal Index (MBNL) includes:

• Maturities: 17 years or longer to final maturity.
• Credit Quality: Minimum rating of Baa3/BBB- or higher, based on Moody’s, S&P, or Fitch.
• Minimum Size: At least $10 million outstanding per bond and $100 million original deal size.
• Exclusions: Private placements, variable rate demand notes, commercial paper, floating rate debt, and securities in legal default.
• Rebalancing: Monthly, with market value weighting.

This methodology ensures broad and representative exposure to the long end of the investment-grade municipal curve.

Why might investors be interested in long-term municipal bonds?

The long end of the municipal yield curve offers among the highest tax-exempt yields available in today’s investment-grade fixed income bond market. For investors who can tolerate modest price volatility, long-duration munis present the opportunity to lock in elevated income levels and potentially benefit from price appreciation if interest rates move lower.

Historically, long-term municipal bonds have provided strong after-tax income and attractive total return potential, especially during periods of declining or stable rate environments. With yields near multi-year highs, investors may find this an opportune time to establish or extend duration within a tax-efficient portfolio.

How do long-term munis compare in the risk/reward profile?

Long-term municipal bonds generally offer higher income potential than shorter-duration fixed income assets, but they also carry greater price sensitivity to changes in interest rates.

Over time, however, investment-grade long munis have demonstrated a compelling risk-adjusted profile: combining the stability of municipal credit quality with higher yields and potential capital appreciation when rates decline. For investors seeking durable, tax-efficient income and longer-term total return, they can serve as a cornerstone allocation within a municipal bond strategy.

How do changing interest rate expectations impact long-term muni performance?

Because long-duration bonds are more sensitive to interest rate changes, their prices can fluctuate more than short-term maturities. When rates fall, long munis typically outperform due to price appreciation; when rates rise, they can lag. For investors with a multi-year horizon, however, reinvested income and the potential for rate stabilization often help smooth total returns over time. Understanding this dynamic can help investors stay focused on long-term income rather than short-term volatility.

Can long-term munis play a role in retirement income planning?

Yes. For investors seeking predictable, tax-exempt income in retirement, long-duration municipal bonds can help lock in higher yields for decades. While they carry more duration risk, their stable credit quality and federally tax-free income can complement other fixed income holdings - especially for those in higher tax brackets looking to preserve after-tax income stability through market cycles.

How does the portfolio management team decide which bonds in the index to own?

MLN uses a sampling approach similar to other VanEck muni ETFs. The team selects a representative basket of bonds that match the index’s risk and return characteristics, optimizing for liquidity, transaction cost efficiency, and credit diversification. This approach seeks to minimize tracking error while maintaining the fund’s long-duration profile and income consistency.

Source: VanEck.

How can investors buy the VanEck Long Muni ETF (MLN)?

Find more information here.