SSGA revamps SPDR Nuveen high yield muni bond ETF

Oct 2nd, 2019 | By | Category: Fixed Income

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State Street Global Advisors (SSGA) has made changes to the $900 million SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB US) which sees the fund ditch index provider S&P Dow Jones Indices in favour of Bloomberg.

SSGA revamps SPDR Nuveen high yield muni bond ETF

SSGA has changed index provider on the SPDR Nuveen S&P High Yield Municipal Bond ETF in favour of Bloomberg.

Effective 1 October 2019, the ETF has ceased tracking the S&P Municipal Yield Index and begun following the Bloomberg Barclays Municipal Yield Index.

The two indices are broadly similar. Both provide diversified exposure to the tax-exempt USD-denominated municipal bond market, covering bonds from four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and pre-refunded bonds.

Additionally, both indices allocate roughly three-quarters of their exposure to bonds with non-investment-grade ratings or those which are unrated. The remaining weight is dedicated to bonds rated investment grade, particularly those in the ‘BBB’ and ‘A’ categories, in a bid to enhance liquidity.

The Bloomberg Barclays index has a modified duration of 6.2 years, compared to 5.6 for the S&P version.

To reflect the change in index provider, the fund has adopted a new name – the SPDR Nuveen Bloomberg Barclays High Yield Municipal Bond ETF. Its ticker symbol and expense ratio of 0.35% remain unchanged.

The two other funds in SSGA’s suite of muni bond ETFs exclusively target securities with investment grade ratings. They are the $2.9 billion SPDR Nuveen Bloomberg Barclays Municipal Bond ETF (TFI US), which provides broad exposure to bonds with maturities between 1 and 25 years, and the $3.6bn SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM US), which targets the shorter end of the yield curve.

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