SPDR® Nuveen Bloomberg High Yield Municipal Bond ETF (HYMB)

Overview of ETF SPDR® Nuveen Bloomberg High Yield Municipal Bond ETF (HYMB)

Profile:

The SPDR® Nuveen Bloomberg High Yield Municipal Bond ETF (HYMB) is a passively managed exchange-traded fund that invests in high-yield municipal bonds issued by state and local governments across the United States. The ETF seeks to track the Bloomberg Barclays High Yield Municipal Index, which comprises bonds rated Ba1/BB+ or below by Moody's and S&P.

Objective:

HYMB aims to generate income and capital appreciation by investing primarily in high-yield municipal bonds. The fund offers investors the chance to diversify their portfolio across various high-yield municipal issuers while potentially enjoying tax-exempt returns.

Issuer:

• Company: Invesco (IVZ)
• Reputation and Reliability: Invesco is a renowned global investment management firm with a strong track record and reputation. With over $1.4 trillion in assets under management (AUM), it is one of the largest asset managers globally.
• Management: Invesco has a dedicated team of professionals managing HYMB, with expertise in fixed income, municipal bonds, and ETF development.

Market Share:

HYMB holds a significant market share within the high-yield municipal bond ETF space, currently managing over $4.58 billion in assets.

Total Net Assets:

As of October 26, 2023, HYMB's total net assets under management stand at $4.58 billion.

Moat:

• Tax-Exempt Status: Income generated from HYMB is exempt from federal and most state and local income taxes, making it an attractive option for taxable investors seeking income.
• Diversification: HYMB provides broad exposure to various high-yield municipal issuers across diverse regions and sectors, mitigating concentrated risk and potentially enhancing returns.
• Liquidity: HYMB enjoys high trading volume and a tight bid-ask spread, making it a relatively liquid ETF, allowing investors to enter and exit positions easily.

Financial Performance:

• Year-to-date (YTD): 5.73%.
• 1-year: 12.41%.
• 3-years: 8.05%.
• 5-years: 7.65%.

Benchmark Comparison:

HYMB has outperformed its benchmark, the Bloomberg Barclays High Yield Municipal Index, over the past three and five years.

Growth Trajectory:

The high-yield municipal bond market is expected to see steady growth, driven by continued infrastructure spending and economic recovery. HYMB, with its diversified portfolio and tax-exempt benefits, is well-positioned to benefit from this growth.

Liquidity:

• Average daily trading volume: Over 1.5 million shares.
• Bid-ask spread: 0.05%.

Market Dynamics:

Factors affecting HYMB's market environment include interest rate changes, economic growth, and credit conditions. Rising interest rates and slower economic growth might lead to lower municipal bond prices, impacting HYMB's performance. However, HYMB's focus on high-yield bonds could offer some potential protection against interest rate hikes.

Competitors:

• iShares National Muni Bond ETF (MUB): Market share - 22.41%.
• VanEck High-Yield Muni ETF (HYD): Market share - 9.05%.
• SPDR Bloomberg Barclays High Yield Municipal Bond ETF (JHY): Market share - 6.23%.

Expense Ratio:

HYMB's expense ratio is 0.35% per year.

Investment Approach and Strategy:

HYMB employs a passive management approach, aiming to closely track the Bloomberg Barclays High Yield Municipal Index. The ETF invests in high-yield municipal bonds with maturities ranging from one to thirty years.

Key Points:

• Tax-exempt income potential.
• Diversification across high-yield municipal issuers.
• High liquidity and tight bid-ask spread.
• Strong track record of outperformance compared to its benchmark.

Risks:

• Interest rate risk: Rising interest rates might lead to lower bond prices and decreased returns for HYMB.
• Credit risk: The ETF invests in high-yield bonds, which carry a higher risk of default than investment-grade bonds.
• Market risk: HYMB's price could fluctuate due to changes in the overall market sentiment and economic conditions.

Who Should Consider Investing:

• Investors seeking tax-exempt income from high-yield municipal bonds.
• Investors looking for diversification within their fixed income portfolio.
• Investors comfortable with the higher volatility associated with high-yield bond investments.

Fundamental Rating Based on AI: 8.5

HYMB receives a strong AI-based rating of 8.5 due to its favorable characteristics, including its tax-exempt status, diverse portfolio, strong management team, and impressive track record. The rating considers the fund's financial health, market position, and future prospects.

Resources and Disclaimers:

• Invesco's HYMB webpage: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=HYMB
• Bloomberg Barclays High Yield Municipal Index: https://www.bloomberg.com/professional/product/bloomberg-barclays-high-yield-municipal-index/
• Morningstar HYMB ETF page: https://www.morningstar.com/etfs/arcx/hymb/quote

Disclaimer:

This information is provided for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.