State Street Launches ESG Muni Bond ETF

It’s the fifth collaboration between SSgA and Nuveen.

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Reviewed by: Dan Mika
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Edited by: Dan Mika

State Street and Nuveen are rolling out their fifth ETF together, this time offering an ESG-tinted spin on municipal bonds. 

The actively managed SPDR Nuveen Municipal Bond ESG ETF (MBNE) launched on the Cboe Global Markets on Tuesday, charging a 0.43% expense ratio. 

MBNE holds municipal bonds selected by subadvisor Nuveen from the investable universe set by the Bloomberg 3-15 Year Blend (2-17) Municipal Bond Index with a focus on bonds rated A, similar to the SPDR Nuveen Municipal Bond ETF (MBND).  

The new fund goes further by using an internal Nuveen rating system to rank municipalities by their adherence to the UN Sustainable Development Goals from a scale of one to five. Bonds from municipalities with a three or higher on that scale are allowed in the fund, along with so-called green bonds from issuers under that baseline that are specifically earmarked for environmental infrastructure projects. 

MBNE’s lone competitor in the ESG muni theme is the VanEck HIP Sustainable Muni ETF (SMI), which is also actively managed and only targets earmarked project bonds. SMI charges 19 basis points less than MBNE. 

SPDR currently manages nearly $12 billion in assets in its four existing ETFs with Nuveen. 

 

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Dan Mika is a reporter for etf.com. He has previously covered business for the Ames Tribune and Cedar Rapids Gazette in Iowa, and BizWest Media in Fort Collins, Colorado. Dan holds a bachelor's degree in journalism from Truman State University.