Yield Opportunities Abound In Muni Bond ETFs

June 20, 2016

Select S&P Dow Jones Municipal Bond Indices As Of June 15, 2016

Index Name MTD QTD YTD 1 Year 3 Years 5 Years 10 Years
S&P Municipal Bond Index 1.02% 2.06% 3.72% 7.17% 4.80% 5.34% 4.95%
S&P Municipal Bond General Obligation Index 0.99% 1.84% 3.24% 6.65% 4.26% 4.61% 4.88%
S&P Municipal Bond Revenue Index 1.10% 2.38% 4.29% 8.37% 5.61% 6.21% 5.16%
S&P Municipal BAB Select Index 2.18% 4.63% 10.55% 13.99% 8.23% 9.52% N/A

 

Depending on your specific asset allocation or income goals, many of the other muni-bond ETFs may be appropriate. (Read How To Pick The Right Muni Bond ETF for additional guidance.)

For tactical investors seeking temporary exposure to munis by using ETFs, evaluate the tradability of the funds relative to the transaction amount you are considering. Read this article for additional insight on ETF tradability.

The table below highlights all of the muni ETFs with dividend yield or yield to maturity of 2% or higher as of June 15, 2016. Yield to maturity is the rate of return anticipated on a bond if it is held until the maturity date and all the income is reinvested.

 

Ticker Fund Duration Credit Quality 3-Month Return 1-Year Return Dividend Yield YTM
XMPT VanEck Vectors CEF Municipal Income ETF -- -- 6.62% 20.32% 4.82% --
HYD VanEck Vectors High-Yield Municipal Index ETF 8.36 B+ 3.97% 10.13% 4.46% 5.16%
HYMB SPDR Nuveen S&P High Yield Municipal Bond ETF 8.38 B+ 5.26% 9.96% 4.30% 7.91%
BAB PowerShares Build America Bond Portfolio 11.21 A+ 5.67% 13.02% 3.94% 4.43%
BABS SPDR Nuveen Barclays Build America Bond ETF 11.31 AA- 8.06% 16.85% 3.65% 4.35%
SHYD VanEck Vectors Short High-Yield Municipal Index ETF 3.65 B+ 1.94% 3.41% 3.16% 4.33%
PZA PowerShares National AMT-Free Municipal Bond Portfolio 5.60 A- 4.36% 9.99% 3.09% 2.37%
MLN VanEck Vectors AMT-Free Long Municipal Index ETF 10.14 A+ 5.28% 12.60% 3.08% 4.11%
PZT PowerShares New York AMT-Free Municipal Bond Portfolio 6.33 A- 3.34% 8.62% 3.04% 3.28%
FMB First Trust Managed Municipal ETF 4.93 BBB 3.29% 8.50% 2.96% 2.93%
RVNU Deutsche X-trackers Municipal Infrastructure Revenue Bond ETF 9.31 A- 5.39% 12.98% 2.85% 3.87%
GMMB Columbia Intermediate Municipal Bond ETF 6.20 BBB 1.45% 7.31% 2.81% 3.14%
PWZ PowerShares California AMT-Free Municipal Bond Portfolio 6.00 AA 4.37% 9.85% 2.72% 2.54%
NYF iShares New York Muni Bond ETF 7.07 A+ 2.70% 7.08% 2.47% 2.92%
MUB iShares National Muni Bond ETF 6.92 A+ 2.80% 7.33% 2.35% 2.96%
CMF iShares California Muni Bond ETF 6.66 A+ 3.18% 7.65% 2.32% 2.55%
INY SPDR Nuveen Barclays New York Municipal Bond ETF 6.91 AA 3.50% 9.73% 2.32% 2.62%
CXA SPDR Nuveen Barclays California Municipal Bond ETF 7.02 AA 3.88% 9.91% 2.30% 2.75%
MUNI PIMCO Intermediate Municipal Bond Active ETF 3.48 A+ 2.16% 6.40% 2.24% 1.50%
ITM VanEck Vectors AMT-Free Intermediate Municipal Index ETF 7.26 AA- 3.11% 8.93% 2.21% 2.87%

 

Patrick Luby is a fixed-income portfolio strategy specialist who has helped many of the industry's best advisors and their clients understand and navigate the municipal bond market for many years. He is the author of www.IncomeInvestorPerspectives.com and has written a number of muni ETF articles for ETF.com. Click here to go to his author page.

This is not a recommendation to buy, sell or hold any of the securities or strategies mentioned. The author does not provide investment, tax, legal or accounting advice. Investors should consult with their own advisor and fully understand their own situation when considering changes to their strategy, tactics or individual investments. Information is based on sources believed to be reliable, but its accuracy is not guaranteed. Additional information is available upon request.

 

 

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