Developed by SSgA and Nuveen Asset Management, the fund is designed to provide investors with cost effective access to high yield municipal bonds, an asset class offering attractive after tax yields.
According to the SSgA, the new ETF seeks to track the performance of the S&P Municipal Yield Index, a market value-weighted index with 70% of its market value allocated to high yield bonds that are non-rated or rated below investment grade, 20% to Baa or BBB rated bonds, and 10% to A rated bonds.
SSgA said that the Index, which excludes commercial paper, derivative securities, notes, taxable municipals, and variable rate debt, will be reviewed and rebalanced monthly.
SSgA senior managing director and global head of SPDR Exchange Traded Funds James Ross said that the addition of the SPDR Nuveen S&P High Yield Municipal Bond ETF strengthens the family of municipal bond ETFs, which now features seven SPDR Nuveen ETFs with more than $2.2bn in assets.
In 2010, State Street Global Advisors entered into an agreement with Nuveen Investments, a provider of investment services to institutions and high-net-worth investors, under which Nuveen Asset Management became sub-adviser of SSgA’s municipal bond ETFs.
