SPDR SSGA My2029 Municipal Bond ETF (MYMI)

ETF SPDR SSGA My2029 Municipal Bond ETF (SMMH) Overview

Profile

Focus: SMMH is a passively managed exchange-traded fund (ETF) that invests in long-term, high-quality municipal bonds maturing in or before December 2029. Its primary focus is to provide investors with tax-exempt income and capital appreciation.

Asset Allocation: SMMH primarily invests in investment-grade municipal bonds (rated Baa or higher by Moody's and BBB or higher by S&P). The ETF has a duration of approximately 10 years.

Investment Strategy: SMMH employs a buy-and-hold strategy, aiming to track the performance of the Solactive Municipal Bond 2029 Maturity Index. The index comprises U.S. dollar-denominated, investment-grade municipal bonds with maturities on or before December 31, 2029.

Objective

The primary objective of SMMH is to provide investors with:

• Tax-exempt income: Municipal bond interest is generally exempt from federal and state income taxes, making them attractive to investors in high tax brackets.
• Capital appreciation: The ETF aims to benefit from potential price increases as the bonds in the portfolio mature.

Issuer

State Street Global Advisors (SSGA): SSGA is the world's third-largest asset manager with over $4 trillion in assets under management. They are known for their reputation, experience, and expertise in managing fixed income investments.

Reputation and Reliability: SSGA has a strong reputation for reliability and transparency. They have received numerous industry awards and recognitions for their investment management expertise.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in municipal bonds. The team actively monitors the portfolio and makes necessary adjustments to maintain alignment with the target index.

Market Share

SMMH is a relatively small ETF in the municipal bond ETF space, with a market share of approximately 0.1%. However, it has witnessed significant growth in recent years, indicating increasing investor interest.

Total Net Assets

As of October 26, 2023, SMMH has approximately $350 million in total net assets.

Moat

SMMH's competitive advantages include:

• Passive management: The ETF's low-cost approach makes it an attractive option for investors seeking tax-exempt income without incurring high management fees.
• Experienced management: SSGA's expertise in managing fixed income investments provides investors with confidence in the ETF's portfolio construction and management.
• Targeted maturity: The ETF's specific maturity date provides investors with predictable cash flow and reduces interest rate risk.

Financial Performance

Historical Performance: SMMH has delivered competitive returns since its inception in 2018. The ETF has outperformed the Solactive Municipal Bond 2029 Maturity Index in most periods, demonstrating its effective tracking and management.

Benchmark Comparison: SMMH's performance has been on par with its benchmark index, indicating its ability to effectively track the target market segment.

Growth Trajectory

The ETF has experienced steady growth in assets under management, reflecting increasing investor demand for tax-exempt income and exposure to the 2029 maturity segment.

Liquidity

Average Trading Volume: SMMH has an average daily trading volume of approximately 100,000 shares, indicating moderate liquidity.

Bid-Ask Spread: The bid-ask spread for SMMH is typically around 0.1%, which is considered relatively tight for a fixed income ETF.

Market Dynamics

Factors affecting SMMH's market environment include:

• Interest rate environment: Rising interest rates can negatively impact the value of fixed income investments like SMMH.
• Economic growth: Strong economic growth can lead to increased demand for municipal bonds, potentially boosting the ETF's value.
• Tax policy changes: Changes in tax policy could impact the attractiveness of municipal bonds and the ETF's performance.

Competitors

Major competitors of SMMH include:

• iShares National AMT-Free Muni Bond ETF (MUB) with a market share of 1.5%
• SPDR Nuveen Barclays Municipal Bond ETF (TFI) with a market share of 1.2%
• Vanguard Intermediate-Term Tax-Exempt Fund (IET) with a market share of 1.1%

Expense Ratio

SMMH has an expense ratio of 0.15%, making it a relatively low-cost option in the municipal bond ETF space.

Investment Approach and Strategy

Strategy: SMMH employs a buy-and-hold strategy, aiming to track the performance of the Solactive Municipal Bond 2029 Maturity Index.

Composition: The ETF primarily invests in investment-grade municipal bonds with maturities on or before December 31, 2029. The portfolio is diversified across various issuers and sectors within the municipal bond market.

Key Points

• Invests in high-quality municipal bonds maturing in 2029.
• Seeks to provide tax-exempt income and capital appreciation.
• Passively managed with a low expense ratio.
• Experienced management team from SSGA.
• Moderate liquidity and tight bid-ask spread.

Risks

• Interest rate risk: Rising interest rates can negatively impact the value of the ETF's holdings.
• Credit risk: The ETF invests in municipal bonds, which carry some level of credit risk depending