Here's a new idea for your portfolio if you're chasing yield but hate paying taxes on it. Amplify ETFs just rolled out the Amplify Municipal CEF High Income ETF (YYYM), a fund that tries to make one of the more complicated corners of the bond market a bit simpler for everyday investors.

The basic pitch is straightforward: municipal bonds pay interest that's often free from federal income tax. Closed-end funds (CEFs) that invest in them can use leverage to juice those yields even higher. But buying and managing a basket of these CEFs yourself is a headache. This new ETF wraps them all up in a single, tradable package. Think of it as a "fund-of-funds" for the muni CEF world, launched to make that tax-advantaged monthly income stream easier for advisors and their clients to tap into.

So, how does it pick which funds to hold? YYYM is designed to track the Nasdaq Municipal Bond CEF High Income Index. That index uses a rules-based screen to select 30 U.S.-listed municipal bond CEFs. It's looking for three things: high yield, a discount to the fund's net asset value (NAV), and decent liquidity. Specifically, it wants funds yielding at least 1.2 times the median of the broader dividend-paying CEF universe, and it tries to avoid ones trading at big premiums to their NAV. The goal is to find attractive income without overpaying for it.

Now, let's talk about the price tag. The ETF comes with a total expense ratio of 2.78%. If your eyes just went wide, you're not wrong—that's significantly higher than your plain-vanilla municipal bond ETF. But here's the thing: a big chunk of that fee isn't going to Amplify for management; it represents the "acquired fund fees" from the underlying CEFs the ETF owns. For an investor in a high tax bracket, the math might still work. The tax-exempt nature of the income, combined with the professional management of those leveraged CEF exposures, could potentially make the higher cost worth it. It's a trade-off: simplicity and tax efficiency, for a price.

This launch isn't coming out of nowhere for Amplify. It's building directly on the playbook of their flagship fund, the Amplify CEF High Income ETF (YYY). That fund, which has gathered about $700 million in assets, invests in both equity and debt closed-end funds. YYYM is essentially a specialized version, narrowing the focus exclusively to municipal bonds. It's a more targeted tool for investors who specifically want tax-efficient fixed income, without the equity CEF exposure.

Amplify itself is riding the wave of ETF growth, ending last year with 39 ETFs and roughly $17 billion in assets under management. This new fund is a bet that there's demand for a simpler on-ramp to the complex, but potentially rewarding, world of high-yield municipal closed-end funds.