Municipal bond ETFs invest mainly in investment grade fixed income securities issued by states, cities, town, and public utilities in USA. The high yield municipal bond funds invest in lower quality municipal debts. Income provided by the funds is exempted from federal income tax. If you are in high tax bracket, investing in municipal bond ETFs can provide higher total return through capital appreciation and tax free income.
Best Municipal Debt ETFsThese best ETFs for 2013 are selected based several things such as future performance, low cost, and growth opportunity. The funds are ranked with among the best in municipal bond ETFs. You may find the fund review below and other fund information.
The 10 best municipal bond ETFs 2014 are:
- iShares S&P National Municipal Bond Fund (MUB)
- PIMCO Intermediate Municipal Bond Exchange-Traded Fund (MUNI)
- iShares S&P Short Term National Municipal Bond Fund (SUB)
- SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB)
- Market Vectors Short Municipal Index ETF (SMB)
- SPDR Nuveen Barclays Short Term Municipal Bond ETF (SHM)
- Market Vectors Intermediate Municipal Index ETF (ITM)
- SPDR Nuveen Barclays Municipal Bond ETF (TFI)
- Market Vectors Municipal Bond Closed-End Fund ETF (XMPT)
- PIMCO Short Term Municipal Bond Exchange-Traded Fund (SMMU)
More: Best National Municipal Bond Closed End Funds
As of July 9, 2013, the fund has -4.79% YTD return. The fund has returned 3.17% over the past 3-year and 4.19% over the past 5-year. It has average maturity of 6.34 years and effective duration of 6.98 years. The top holdings as of July 5, 2013 are Blackrock Liq Fd Munifund (1.44%) and California St (0.54%). The top sectors are Transportation (21.39%), Various Purpose (19.68%), Utility (18.16%) and Tax-Revenue (15.19%).
PIMCO Intermediate Municipal Bond Exchange-Traded Fund (MUNI)Joseph Deane is the current fund manager. This PIMCO Intermediate Municipal Bond Exchange-Traded fund is designed to seek tax-exempt income. It has a diversified portfolio of primarily intermediate duration and high credit quality bonds. Morningstar rated this fund with 3-stars rating. It has total net assets of $184.26 million. The fund also has 12-month yield of 2.30%.
As one of the best municipal bond ETFs 2013, it was introduced to public in 2009. It is currently traded at discount -0.21% from its NAV. This bond fund has returned 8.01% in 2011 and 4.71% in 2012. It has YTD return of -3.82% as of July 9, 2013. The top region breakdown is New York (14.66%), Texas (12.11%) and California (10.11%). The top holdings are US Treasury Note (4.72%) and US Treasury Bills (2.98%).
SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB)This SPDR Nuveen S&P High Yield Municipal Bond ETF aim is to provide investment results that correspond generally to the price and yield performance of the S&P Municipal Yield Index. The current share price is $52.45 (as of July 9, 2013). Its annual expense ratio is only 0.45%. As one of the best High Yield Muni ETFs, it has total assets of $216.14 million.
More: Top Performer Municipal Bond ETFs December 2012
The top holdings as of July 4, 2013 are Golden St Tobacco Securitization (1.59%), Tobacco Settlement Fing Corp (1.04%) and Tobacco Securitization Authority (1.0%). California (19.00%) is the top state in this fund.
Market Vectors Short Municipal Index ETF (SMB)This Market Vectors Short Municipal Index ETF is designed to track an index of short-duration municipal. The expense ratio is 0.20% per year. The total net assets are $218.56 million. It has 12-month dividend yield of 1.44%. The effective duration is 3.15 years and 4.95 years to maturity. The CUSIP of this fund is 57060U803.
As of June 2013, it has a total of 275 holdings. The top holdings are State of Illinois (2.74%), County of Baltimore MD (1.65%) and State of North Carolina (1.62%). For 2013, the fund has YTD return of -0.98%. It has returned 1.73% over the past 3-year and 3.28% over the past 5-year.
Municipal Bond ETFs Profile
|No||Fund Description||Ticker||Rating||Assets (Mil)||Expense Ratio||Yield|
|1||iShares S&P National AMT-Free Muni Bd||MUB||3||$3,460||0.25%||2.91%|
|2||PIMCO Intermediate Municipal Bond ETF||MUNI||3||$184||0.35%||2.30%|
|3||iShares S&P S/T Natnl AMT-Free Muni Bd||SUB||2||$643||0.25%||0.92%|
|4||SPDR Nuveen S&P High Yield Municipal Bd||HYMB||N/A||$216||0.45%||4.93%|
|5||Market Vectors Short Municipal Index ETF||SMB||4||$219||0.20%||1.44%|
|6||SPDR Nuveen Barclays Capital S/T Muni Bd||SHM||3||$1,920||0.20%||1.12%|
|7||Market Vectors Intermediate Muni ETF||ITM||4||$676||0.24%||2.60%|
|8||SPDR Nuveen Barclays Capital Muni Bond||TFI||3||$1,070||0.23%||2.81%|
|9||Market Vectors CEF Municipal Income ETF||XMPT||N/A||$23||0.40%||5.81%|
|10||PIMCO Short Term Municipal Bond ETF||SMMU||2||$63||0.35%||0.94%|
|No||Fund Description||Ticker||YTD Return %||1-Year Return %||3-Year Return %||5-Year Return %|
|1||iShares S&P National AMT-Free Muni Bd||MUB||-4.79%||-2.78%||3.17%||4.19%|
|2||PIMCO Intermediate Municipal Bond ETF||MUNI||-3.82%||-1.51%||2.93%||N/A|
|3||iShares S&P S/T Natnl AMT-Free Muni Bd||SUB||-0.75%||-0.90%||0.91%||N/A|
|4||SPDR Nuveen S&P High Yield Municipal Bd||HYMB||-7.30%||-1.99%||N/A||N/A|
|5||Market Vectors Short Municipal Index ETF||SMB||-0.98%||-0.64%||1.73%||3.28%|
|6||SPDR Nuveen Barclays Capital S/T Muni Bd||SHM||-0.97%||-0.63%||1.27%||2.69%|
|7||Market Vectors Intermediate Muni ETF||ITM||-5.71%||-3.04%||3.53%||4.86%|
|8||SPDR Nuveen Barclays Capital Muni Bond||TFI||-5.53%||-2.90%||3.31%||4.57%|
|9||Market Vectors CEF Municipal Income ETF||XMPT||-10.62%||-9.37%||N/A||N/A|
|10||PIMCO Short Term Municipal Bond ETF||SMMU||-0.19%||0.08%||1.00%||N/A|