RiverNorth Managed Duration Municipal Income Fund II, Inc.
Daily Data
As of 2.2.2023
NAV $17.99
Market Price $16.63
Premium/ Discount -7.58%
Total Net Assets $152.14M


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Tuesday January 3, 2023  BusinessWire

Investment Objective & Philosophy

The RiverNorth Managed Duration Municipal Income Fund II, Inc. (the "Fund") seeks to provide current income exempt from regular U.S. federal income taxes1 with a secondary objective of total return.

While RiverNorth Capital Management, LLC ("RiverNorth") believes markets are generally efficient, closed-end funds offer a unique structure whereby investors can purchase a diversified fund and potentially generate additional return through the change in the relationship between the closed-end fund's market price and Net Asset Value (NAV)2. RiverNorth also believes combining a municipal closed-end fund strategy with a proven municipal bond manager such as MacKay Municipal Managers™3, the municipal bond team within MacKay Shields LLC ("MacKay Shields"), provides an attractive investment vehicle for investors.

Diversification does not ensure a profit or guarantee against loss.

Investment Strategy

RiverNorth allocates the Fund's managed assets between two principal strategies: Tactical Municipal Closed-End Fund Strategy (managed by RiverNorth) and Municipal Bond Income Strategy (managed by MacKay Shields).

RiverNorth Tactical Municipal Closed-End Fund Strategy

MacKay Shields Municipal Bond Income Strategy

RiverNorth believes that complementary investment strategies may allow the Fund to opportunistically generate returns during varying market conditions.

Target portfolio asset allocations are shown for illustrative purposes only and actual allocations may be anywhere across a range.

Active Duration Management

Target duration of +/- 3 years of the weighted average effective duration of the Bloomberg US Municipal Index (excluding the effects of leverage)

Bloomberg US Municipal Index Duration
6.19 years^

RMMZ Duration Chart

^ Data as of 12.31.2022

Investment Rationale

The Fund is a municipal bond focused, closed-end fund seeking to provide:

The Fund also:

Fund Information as of 12.31.2022

CUSIP 76882M1045
Inception Date 2.10.2022
Total Managed Assets* $240.5M
Benchmark Bloomberg US Municipal Index8
Distribution Frequency Monthly
Estimated Unhedged Duration9 10.56
Estimated Hedged Duration9 7.87
Limited Term and Eligible Tender Feature7
  • Beginning one year before February 16, 2037 (the "Termination Date"), the Fund may begin to liquidate all or a portion of the Fund's portfolio. At the discretion of the Board of Directors ("Board"), the Termination Date may be extended (i) once for up to one year, and (ii) once for up to an additional six months; or
  • Within twelve months prior to the Termination Date, the Fund may conduct a tender offer to purchase 100% of the then outstanding shares. Following the completion of the tender offer, the Fund must have at least $100 million of net assets. The Board may then eliminate the Termination Date and convert the Fund to a perpetual structure upon the affirmative vote of a majority of the Board

* Managed Assets means the total assets of the Fund, including assets attributable to leverage, minus liabilities (other than debt representing leverage and any preferred stock that may be outstanding). Such assets attributable to leverage include the portion of assets in tender option bond trusts of which the Fund owns TOB Residuals that has been effectively financed by the trust's issuance of TOB Floaters. Please see the Fund's prospectus for further information.


Total Returns for the Period Ending 12.31.2022 Dec 3 Mo Since
RiverNorth Managed Duration Municipal Income Fund II, Inc.
Net Asset Value
-0.13% 7.01% -7.39%
RiverNorth Managed Duration Municipal Income Fund II, Inc.
Market Price
-2.16% 1.09% -19.12%
Bloomberg US Municipal Bond Index8 0.29% 4.10% -5.92%

Performance data quoted represents past performance, which is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and investment return of an investment will fluctuate so that your shares may be worth more or less than their original cost. You can obtain performance data current to the most recent month end by calling 844.569.4750. Total return measures net investment income and capital gain or loss from portfolio investments. All performance shown assumes reinvestment of dividends and capital gains distributions.

* Inception Date: 2.10.2022

Since Inception returns are cumulative since the fund did not yet have a full year of history.

Market price is the price that the Fund closed at on the primary listing exchange on the as-of date listed above.

NAV is the Net Asset Value of the Fund and equals the value of all the Fund's assets (less liabilities) divided by the number of shares outstanding.

Expenses are estimates for the Fund's first fiscal year and do not include the effects of leverage.


Strategy Weights as of 12.31.2022
Strategy Weighting
MacKay Municipal Bond Income Strategy 65%
RiverNorth Municipal Closed-End Fund Strategy 35%
MacKay Municipal Bond Income Strategy 65%
RiverNorth Municipal Closed-End Fund Strategy 35%
Credit Quality Distribution as of 12.31.2022
Credit Quality Weighting
Investment Grade 94%
Not Rated 5%
High Yield 2%
Investment Grade 94%
Not Rated 5%
High Yield 2%

Totals may not add up to 100% due to rounding.


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Portfolio Management

Patrick Galley, CFA
Chief Executive Officer, Chief Investment Officer
Read full bio »
Steve O'Neill, CFA
Portfolio Manager
Read full bio »
John Loffredo, CFA
Executive Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
Robert DiMella, CFA
Executive Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
Mike Petty
Senior Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
David Dowden
Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
Scott Sprauer
Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
Robert Burke, CFA
Managing Director, Portfolio Manager
MacKay Shields
Read full bio »
Michael Denlinger, CFA
Director, Portfolio Manager
MacKay Shields
Read full bio »

Disclosures & Definitions

Although the income from the Fund's municipal bond investments is generally exempt from federal income tax, you may owe taxes on any capital gains realized through the Fund's trading or through your own redemption of shares. For some investors, a portion of the Fund's income may be subject to state and local taxes, as well as to the federal alternative minimum tax.

Please consult your personal tax advisor regarding the tax implications of owning this Fund.

Risk is inherent in all investing. Investing in any investment company security involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Therefore, before investing in the Common Shares, you should consider the risks as well as the other information in the prospectus.

More detailed information regarding these risks can be found in the Fund's prospectus.

Fund Risks: Credit Risk - a borrower may be unable to make interest or principal payments when they are due. Funds that invest in Municipal Bonds rely on the ability of the issuer to service its debt. This subjects the Fund to credit risk in that the municipal issuer may be fiscally unstable or exposed to large liabilities that could impair its ability to honor its obligations. Municipal issuers with significant debt service requirements, in the near-to mid-term, unrated issuers and those with less capital and liquidity to absorb additional expenses may be most at risk. To the extent the Fund invests in lower quality or high yield Municipal Bonds, it may be more sensitive to the adverse credit events in the municipal market. The treatment of municipalities in bankruptcy is more uncertain, and potentially more adverse to debt holders, than for corporate issues. Interest Rate Risk - the value of Municipal Bonds, similar to other fixed income securities, will likely drop as interest rates rise in the general market. Conversely, when rates decline, bond prices generally rise.

Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against loss.

An investment in the Fund is not appropriate for all investors and is not intended to be a complete investment program. The Fund is designed as a long-term investment and not as a trading vehicle.

Investors should consider the Fund's investment objective, risks, charges and expenses carefully before investing. The prospectus should be read carefully before investing. For more information, please read the prospectus, call your financial professional or call 844.569.4750.

The fund is a closed-end fund and closed-end funds do not continuously issue shares for sale as open-end mutual funds do. Since the initial public offering, the Fund now trades in the secondary market. Investors wishing to buy or sell shares need to place orders through an intermediary or broker. The share price of a closed-end fund is based on the market's value.

CFA® is a trademark owned by the CFA Institute.

1 May be includable in taxable income for purposes of the Federal alternative minimum tax.

2 The price at which a closed-end fund trades often varies from its NAV. Some funds have market prices below their net asset values - referred to as a discount. Conversely, some funds have market prices above their net asset values - referred to as a premium.

3 MacKay Municipal Managers™ is a trademark used by a portfolio management team within MacKay Shields LLC ("MacKay Shields").

4 Investments may include securities that have a rating that is below investment grade, including "high yield" securities, which are bonds that have adequate capacity to meet financial commitments, but are more subject to adverse economic conditions or changing circumstances, as defined by Nationally Recognized Statistical Rating Organizations ("NRSRO"), such as Fitch. All bonds are subject to interest rate risk. If rates increase, the value generally declines.

5 See prospectus for concentration limits with respect to the Fund's direct investments in municipal bonds, although such exposure could be greater after factoring in the investments of the Underlying Funds in which the Fund may invest. The Fund, and the Underlying Funds in which the Fund invests, may invest in securities of any credit quality, including securities that are rated below investment grade that receive the lowest ratings from nationally recognized statistical rating organizations.

6 Leverage is a speculative technique that exposes a closed-end fund to greater risk and increased costs than if it were not used. The use of leverage may cause greater volatility in the level of a closed-end fund's NAV, market price and distributions on its common shares. Leverage will also result in higher fees to the closed-end fund manager because the amount of assets under management will be included in the Fund's managed assets. There can be no assurance that a closed-end fund will use leverage or that its leveraging strategy will be successful during any period in which it is employed.

7 The Fund will terminate on or before February 16, 2037 (the "Termination Date"); provided, that if the Board of Directors ("Board") believes that, under then-current market conditions, it is in the best interests of the Fund to do so, the Fund may extend the Termination Date: (i) once for up to one year (i.e., up to February 16, 2038), and (ii) once for up to an additional six months (i.e., up to August 16, 2038), in each case upon the affirmative vote of a majority of the Board and without common stockholder approval. In addition, as of a date within twelve months preceding the Termination Date, the Board may cause the Fund to conduct a tender offer to all common stockholders to purchase Common Shares of the Fund at a price equal to the net asset value per Common Share on the expiration date of the tender offer (an "Eligible Tender Offer"). The Board has established that, following an Eligible Tender Offer, the Fund must have at least $100 million of net assets to ensure the continued viability of the Fund (the "Termination Threshold"). In an Eligible Tender Offer, the Fund will offer to purchase all Common Shares held by each common stockholder; provided, that if the number of properly tendered Common Shares would result in the Fund's net assets totaling less than the Termination Threshold, the Eligible Tender Offer will be terminated and no Common Shares will be repurchased pursuant to the Eligible Tender Offer. Instead, the Fund will begin (or continue) liquidating its portfolio and proceed to terminate on or before the Termination Date. Following the completion of an Eligible Tender Offer, the Board may eliminate the Termination Date upon the affirmative vote of a majority of the Board and without a Common Shareholder approval. In making a decision to eliminate the Termination Date to provide for the Fund's perpetual existence, the Board will take such actions with respect to the continued operations of the Fund as it deems to be in the best interests of the Fund, based on market conditions at such time, the extent of Common Shareholder participation in the Eligible Tender Offer and all other factors deemed relevant by the Board in consultation with RiverNorth.

8 The Bloomberg US Municipal Index is considered representative of the broad market for investment grade, tax-exempt bonds with a maturity of at least one year. The index cannot be invested in directly and does not reflect fees and expenses.

9 Estimated Duration: Duration is a measure of the sensitivity of the price of a fixed income investment to a change in interest rates. Duration is expressed as a number of years. Duration is estimated by the adviser based on certain assumptions from third-party data and is subject to change. The difference between Unhedged and Hedged duration is that hedged duration includes the effect of a short US Treasury Futures position used to manage interest rate risk.

Closed-End Fund Audit Committee Charter