Duration As Guide With Muni ETFs

February 22, 2016

Ticker Select Municipal ETFs
w/ Duration Less Than 4.0
Duration Dividend Yield
Prior 12 months income to share price
Weighted Credit Quality YTM
as of
2/12/16
IBME iShares iBonds Sep 2016 AMT-Free Muni Bond 0.60 0.94% AA 0.29%
MEAR iShares Short Maturity Municipal Bond 1.33 -- A 1.13%
IBMF iShares iBonds Sep 2017 AMT-Free Muni Bond 1.54 1.23% AA 0.70%
SUB iShares Short-Term National AMT-Free Muni Bond 2.01 0.77% AA 0.95%
SMMU PIMCO Short Term Municipal Bond 2.03 0.89% A 1.31%
IBMG iShares iBonds Sep 2018 AMT-Free Muni Bond 2.44 0.92% AA 0.97%
SHM SPDR Nuveen Barclays Short Term Municipal Bond 2.75 0.92% AA 3.27%
PRB Market Vectors Pre-Refunded Municipal 2.76 0.74% AA- 1.08%
SMB Market Vectors AMT-Free Short Municipal 2.93 1.12% AA- 1.28%
IBMH iShares iBonds Sep 2019 AMT-Free Muni Bond 3.30 1.07% AA 1.16%
SHYD Market Vectors Short High-Yield Municipal Index 3.65 3.18% BB- 4.17%

 

Income Generation: You may wish to consider intermediate to longer-term duration funds for the higher amounts of current income. That higher income (and higher duration) will mean more market risk, an important consideration should you decide to sell in the future.

Upper-income-tax-bracket investors will want to verify their status regarding the AMT before considering a muni ETF that includes AMT-eligible income. Inclusion of noninvestment-grade exposure should be based on portfolio objectives and not on the amount of incremental income expected.

Ticker Select Municipal ETFs
w/ Duration Less Than 5.0
Duration Dividend Yield
Prior 12 months income to share price
Weighted Credit Quality YTM
as of
2/12/16
MUNI PIMCO Intermediate Municipal Bond Strategy 5.07 2.20% A 2.31%
GMMB Columbia Intermediate Municipal Bond 5.21 2.82% A 2.70%
IBMK iShares iBonds Dec 2022 AMT-Free Muni Bond 5.71 -- AA- 1.78%
FMB First Trust Managed Municipal 6.1 2.39% BBB+ 3.34%
VTEB Vanguard Tax-Exempt Bond 6.23 -- AA- 2.91%
MUB iShares National AMT-Free Muni Bond 6.3 2.46% AA- 3.09%
TFI SPDR Nuveen Barclays Municipal Bond 7.25 2.25% AA 7.28%
ITM Market Vectors AMT-Free Intermediate Municipal 7.25 2.23% AA- 2.87%
HYMB SPDR Nuveen S&P High Yield Municipal Bond 7.84 4.52% B+ 5.05%
PZA PowerShares National AMT-Free Municipal Bond 7.94 3.53% AA- 4.06%
HYD Market Vectors High-Yield Municipal 8.3 4.75% B+ 9.34%
RVNU Deutsche X-trackers Municipal Infrastructure Revenue Bond ETF 9.84 2.96% A 4.01%
MLN Market Vectors AMT-Free Long Municipal 10.14 3.32% A+ 4.11%

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