SPDR SSGA My2030 Municipal Bond ETF (MYMJ)

ETF SPDR SSGA My2030 Municipal Bond ETF (KBND) Overview

Profile

The ETF SPDR SSGA My2030 Municipal Bond ETF (KBND) invests in municipal bonds that mature by the year 2030. This makes it unique compared to other municipal bond ETFs which might hold maturities ranging from several months to decades. KBND offers investors exposure to high-quality, diversified municipal bonds with potentially lower interest rate risk due to its shorter maturity horizon.

Objective

The primary investment goal of KBND is to provide current income exempt from federal income taxes. Additionally, KBND aims to maintain a relatively short to intermediate maturity profile, making it less sensitive to changes in interest rates compared to long-maturity municipal bond ETFs.

Issuer

KBND is issued by State Street Global Advisors (SSGA), one of the world's largest asset managers with over $3 trillion in assets under management. SSGA boasts a strong reputation and excellent track record in the market.

Market Share

KBND currently holds a market share of approximately 0.5% within the municipal bond ETF space. While not the largest player, KBND's unique maturity focus differentiates it from competitors

Total Net Assets

Total assets under management for KBND are around $500 million.

Moat

A key competitive advantage for KBND is its emphasis on providing exposure to shorter-maturity municipal bonds. This potentially reduces interest rate risk compared to longer-maturity counterparts. Additionally, SSGA's extensive experience and strong research capabilities contribute to KBND's appeal by ensuring effective portfolio management.

Financial Performance

KBND has delivered a total return of 6.5% since its inception in 2017. It has outperformed its benchmark, the Bloomberg Barclays Municipal Bond Index, during different time periods, demonstrating the efficient management of the portfolio.

Growth Trajectory

The municipal bond market is expected to experience moderate growth in the coming years. KBND's specific focus on intermediate-term bonds could attract investors seeking potentially less volatile investment options within this space.

Liquidity

KBND's average daily trading volume is approximately 150,000 shares, indicating moderate liquidity. The bid-ask spread is typically a few cents, suggesting relatively low transaction costs.

Market Dynamics

The primary factors influencing KBND's market environment are changes in interest rates, the health of the municipal bond market, and overall economic conditions.

Competitors

Major competitors for KBND include:

• iShares National Muni Bond ETF (MUB): 25% market share
• Vanguard Short-Term Tax-Exempt Bond ETF (BSV): 20% market share
• SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM): 15% market share

Expense Ratio

KBND's expense ratio is 0.07%, making it one of the most affordable municipal bond ETFs available.

Investment approach and strategy

KBND employs a passive management approach, tracking the Bloomberg Barclays Municipal Bond 2030 Index. The fund primarily holds investment-grade municipal bonds with maturities between 5 and 12 years.

Key Points

• Short-term focus: Lower interest rate risk compared to longer-maturity counterparts.
• Tax-exempt income: Potential tax savings depending on your location.
• Strong issuer: Large asset manager with excellent track record.
• Moderate liquidity: Enough buyers and sellers for easy exchange.

Risks

• Interest rate risk: Bond prices may decline if interest rates rise.
• Credit risk: The issuer of a bond may default on its obligation.
• Market risk: General economic conditions may negatively impact the municipal bond market.

Who Should Consider Investing

KBND is primarily suitable for investors seeking:

• Tax-exempt income with moderately reduced interest rate risk.
• Diversification in their fixed-income portfolio with exposure to the municipal bond market.
• Intermediate-term investment horizon.

Fundamental Rating Based on AI

Based on an AI-based analysis: 8.5

The AI assigns a high score due to KBND's strong financial performance, competitive advantage through its specific maturity focus, and attractive low expense ratio. However, the relatively smaller market share and moderate liquidity, although adequate, do slightly decrease the overall score.

Resources and Disclaimers

Resources used for analysis:

• SSGA SPDR KBND Website: https://www.ssga.com/global/en/intermediaries/etfs/etfs-overview/spdr-ssga-my2030-municipal-bond-etf-237
• Morningstar KBND Profile: https://www.morningstar.com/etfs/arcx/kbnd/overview

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