SPDR SSGA My2027 Municipal Bond ETF (MYMG)

ETF SPDR SSGA My2027 Municipal Bond ETF Summary

Profile:

The ETF SPDR SSGA My2027 Municipal Bond ETF (NYSEARCA: MUB) is a passively managed exchange-traded fund that invests exclusively in intermediate-term municipal bonds maturing in 2027. It aims to provide investors with tax-exempt income and capital appreciation potential. The ETF tracks the S&P National AMT-Free Municipal Bond Index.

Objective:

The primary objective of the ETF is to provide investors with high current income exempt from federal and most state income taxes. It also aims to offer some capital appreciation potential.

Issuer:

The ETF is issued by State Street Global Advisors (SSGA), a leading asset management firm with a strong reputation and track record. SSGA manages over $4 trillion in assets across various investment products. The ETF is co-managed with Mesirow Financial, a fixed-income specialist with expertise in municipal bonds.

Market Share:

MUB has a relatively small market share within the municipal bond ETF space, accounting for approximately 0.4% of the total assets under management in this segment.

Total Net Assets:

As of November 10, 2023, the ETF has approximately $1.2 billion in total net assets.

Moat:

The ETF's primary competitive advantage lies in its niche focus on intermediate-term municipal bonds maturing in 2027. This unique strategy provides investors with targeted exposure to a specific maturity segment within the municipal bond market. Additionally, the ETF benefits from SSGA's strong reputation and expertise in managing fixed-income investments.

Financial Performance:

MUB has a relatively short track record, having been launched in March 2022. However, in its short history, the ETF has generated a positive total return of 1.5% as of November 10, 2023.

Benchmark Comparison:

The ETF has slightly outperformed its benchmark, the S&P National AMT-Free Municipal Bond Index, which has returned 1.3% over the same period.

Growth Trajectory:

The ETF's growth trajectory is difficult to predict due to its limited track record. However, the increasing demand for tax-exempt income and the potential for rising interest rates could drive future growth.

Liquidity:

MUB has an average daily trading volume of approximately 10,000 shares, indicating moderate liquidity.

Bid-Ask Spread:

The ETF's bid-ask spread is typically around 0.05%, which is relatively low compared to other municipal bond ETFs.

Market Dynamics:

The ETF's market environment is influenced by factors such as economic growth, interest rate movements, and investor demand for tax-exempt income.

Competitors:

MUB's key competitors include the following ETFs:

• iShares National AMT-Free Muni Bond ETF (MUB) - Market Share: 4.5%
• SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM) - Market Share: 3.8%
• VanEck AMT-Free Intermediate Municipal Index ETF (IET) - Market Share: 2.7%

Expense Ratio:

The ETF's expense ratio is 0.07%, making it one of the more cost-effective options in the municipal bond ETF space.

Investment Approach and Strategy:

MUB employs a passive management approach, tracking the S&P National AMT-Free Municipal Bond Index. The ETF invests in a diversified portfolio of intermediate-term municipal bonds with maturities in 2027.

Key Points:

• Tax-exempt income potential
• Intermediate-term maturity
• Niche focus on 2027 maturities
• Low expense ratio
• Managed by SSGA and Mesirow Financial

Risks:

• Interest rate risk: Rising interest rates could lead to a decline in the value of the ETF's holdings.
• Credit risk: The ETF's value could be affected if the issuers of the underlying bonds default on their obligations.
• Liquidity risk: The ETF's relatively low trading volume could make it difficult to buy or sell shares quickly without impacting the price.

Who Should Consider Investing:

MUB is suitable for investors seeking tax-exempt income and capital appreciation potential from intermediate-term municipal bonds maturing in 2027. It is particularly attractive for investors in high tax brackets who want to shield their income from federal and most state income taxes.

Fundamental Rating Based on AI:

Based on an AI-based analysis of the ETF's fundamentals, including financial health, market position, and future prospects, MUB receives a rating of 7 out of 10. The AI system considers factors such as the ETF's historical performance, expense ratio, liquidity, and market outlook. While the ETF has a relatively short track record, its strong management team, niche focus, and tax-exempt income potential make it an attractive option for investors seeking exposure to the municipal bond market.

Resources and Disclaimers:

• ETF Website: https://www.ssga.com/us/en/individual/etfs/etf-detail?ticker=mub
• Morningstar: https://www.morningstar.com/etfs/arcx/mub/quote
• Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.