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Getting High in the Munibond Market

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Some munibond investors complain that yields still aren’t high enough, but a new munibond ETF from State Street Global Advisors (SSgA) aims to change that.

SSgA launched theSPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB), which follows the S&P Municipal Yield Index. The fund has 70 percent of its market value allocated to high yield bonds that are non-rated or rated below investment grade. The underlying index excludes commercial paper, derivative securities, notes, taxable municipals and variable rate debt. It’s reviewed and rebalanced monthly.

“In combining the advantages of federal tax free income with competitive, risk-adjusted returns, the potential benefits of high yield municipal bonds are attracting a growing number of sophisticated financial advisors and investors,” says James Ross, senior managing director and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “The addition of the SPDR Nuveen S&P High Yield Municipal Bond ETF strengthens our family of municipal bond ETFs, which now features seven SPDR Nuveen ETFs with more than $2.2 billion in assets.”

In 2010, State Street Global Advisors entered into an agreement with Nuveen Investments, under which Nuveen Asset Management became sub-advisor of SSgA’s municipal bond ETFs.

HYMB’s annual expense ratio is 0.45 percent.