Municipal Bonds
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Blog | December 18Strong Demand, Not Enough Supply Continues to Drive Munis
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HYDVanEck Vectors High Yield Muni ETF
Market Updates*
- While spreads have tightened since the March 2020 sell-off, we believe there is room to tighten given the prospects of a faster-than-expected recovery.
- The current recovery is already well under way, helped by a stronger economic and financial foundation, more immediate fiscal and monetary response, and some direct aid to state and local governments.
- Names and sectors that were more affected by the pandemic—such as corporate-backed munis, healthcare and special tax—are likely to drive performance, while tobacco and COFINA (Puerto Rico’s Sales Tax Financing Corporation) may continue to provide good carry and marginal price appreciation.
Fund Description
The VanEck Vectors® High Yield Muni ETF (HYD®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Bloomberg Barclays Municipal Custom High Yield Composite Index (LMEHTR), which is intended to track the overall performance of the U.S. dollar denominated high yield long-term tax-exempt bond market.
-
Fund Ticker
HYD -
Exchange
Cboe -
ETF Structure
Physical -
Administrator
Van Eck Associates -
Custodian
State Street Bank and Trust Company -
Index Ticker
LMEHTR -
Index Rebalancing
Monthly -
2020 Preliminary NAIC
4.C
Designation7
as of 04/20/21
-
30-Day SEC Yield1
2.80% -
Total Net Assets
$3.4B -
Number of Holdings
1886 -
Options
Available -
Gross Expense Ratio2
0.35% -
Net Expense Ratio/TER2
0.35% -
Distribution Frequency
Monthly
1, 2, 7 See Important Disclosure.
Key Points
- High-Yield Muni Focus
Underlying Index comprised of highest-yielding municipal bonds with income generally exempt from federal taxes
- Enhanced Liquidity Feature
Index includes 25% BBB investment-grade exposure for enhanced liquidity
- Diverse Sector Exposure and Low Default Rates
Index covers wide range of muni sectors and securities with historically low default rates*
* Source: Moody’s Investors Services; "U.S. Municipal Bond Defaults and Recoveries, 1970-2019"
Yields
as of 04/20/21
-
30-Day SEC Yield1
2.80% -
Distribution Yield1
3.74% -
12-Month Yield1
3.84% -
Taxable Equivalent 30-Day SEC Yields1a
-
12% Federal Tax Rate
3.18% -
22% Federal Tax Rate
3.59% -
24% Federal Tax Rate
3.68% -
32% Federal Tax Rate
4.12% -
35% Federal Tax Rate
4.31% -
37% Federal Tax Rate
4.44%
Fees & Expenses2
-
Management Fee
0.35% -
Other Expenses
-- -
Acquired Fund Fees and Expenses
-- -
Gross Expense Ratio
0.35% -
Fee Waivers andExpense Reimbursement
-- -
Net Expense Ratio/TER2
0.35%
Trading Information
-
Fund Ticker
HYD -
Index Total Return Ticker
LMEHTR -
NAV
HYDNV -
Intraday NAV (IIV)5
HYDIV -
Shares Outstanding
54,946,401 -
Estimated Cash
HYDEU -
Total Cash
HYDTC -
CUSIP
92189H409 -
ISIN
US92189H4092
Fundamentals4
as of 04/19/21
-
Yield to Worst
3.21% -
Yield to Maturity
4.29% -
Effective Duration (yrs)
6.48 -
Duration to Worst (yrs)
5.05 -
Modified Duration (yrs)
7.74 -
Spread Duration (yrs)
6.53 -
Years to Maturity
20.86 -
Coupon
5.17% -
AMT
14.27%
Investment Professionals
James Colby III
- Portfolio Manager for non-taxable Fixed Income ETFs and Senior Municipal Strategist
- Joined VanEck in 2007
- Prior to joining VanEck, held several senior municipal fixed income positions at Lord Abbett, John Hancock Funds, Old Harbor Capital and Evergreen Asset Management
- Member of National Municipal Buyers Conference (Chairman, 1996), Municipal Forum of New York, Boston Fixed Income Management Society and The Economics Club of New York
- MBA, Finance, Hofstra University
- BA, Economics and International Relations, Brown University
Daniel Cho
- Associate Portfolio Manager for Fixed Income ETFs
- Joined VanEck in 2013
- Prior to his current role, held a portfolio administration position for the firm’s alternative investment funds
- MS, Finance, University of Rochester
- BS, Information Sciences and Technology, Pennsylvania State University
Stephanie Wang
- Associate Portfolio Manager for Fixed Income ETFs
- Joined VanEck in 2016
- MS, Financial Engineering, Baruch College
- BBA, Finance, Baruch College
Jared Model
- Senior Trader, Portfolio Analyst for Fixed Income ETFs
- Joined VanEck in 2017
- Previously, Trader at Beck, Mack & Oliver LLC and monitored markets and executed equity and fixed income trades and Fixed Income Operations at Gleacher & Company Securities, Inc.
- MBA, Finance, Montclair State University
- BS, concentration in Accounting and Finance, minor in Computer Science, University of Vermont
Prices as of 04/20/21
Periods with Elevated Premiums/Discounts
End Date | Trading Days | Reason / Contributing Factors | |
---|---|---|---|
05/06/20 | 18 | Market Volatility |
Performance History: Average Annual Total Returns* (%)
1 MO | 3 MO | YTD | 1 YR | 3 YR | 5 YR | 10 YR | LIFE 02/04/09 |
|
---|---|---|---|---|---|---|---|---|
HYD (NAV) | 0.73 | 1.57 | 1.57 | 9.82 | 4.09 | 4.02 | 5.85 | 6.89 |
HYD (Share Price) | 1.26 | 1.95 | 1.95 | 23.92 | 4.35 | 4.14 | 5.83 | 6.93 |
LMEHTR (Index) | 1.07 | 2.03 | 2.03 | 13.87 | 6.85 | 6.03 | 7.40 | 8.49 |
Performance Differential (NAV - Index) | -0.34 | -0.46 | -0.46 | -4.05 | -2.76 | -2.01 | -1.55 | -1.60 |
1 MO | 3 MO | YTD | 1 YR | 3 YR | 5 YR | 10 YR | LIFE 02/04/09 |
|
---|---|---|---|---|---|---|---|---|
HYD (NAV) | 0.73 | 1.57 | 1.57 | 9.82 | 4.09 | 4.02 | 5.85 | 6.89 |
HYD (Share Price) | 1.26 | 1.95 | 1.95 | 23.92 | 4.35 | 4.14 | 5.83 | 6.93 |
LMEHTR (Index) | 1.07 | 2.03 | 2.03 | 13.87 | 6.85 | 6.03 | 7.40 | 8.49 |
Performance Differential (NAV - Index) | -0.34 | -0.46 | -0.46 | -4.05 | -2.76 | -2.01 | -1.55 | -1.60 |
Top 10 Holdings (%) as of 03/31/21 Daily Holdings
to view
full data
Issuer Name | State | Weighting (%) | |
---|---|---|---|
Chicago Ill Brd Ed |
IL
|
4.21 | |
New Jersey St Transn Tr Fd Auth |
NJ
|
3.36 | |
Puerto Rico Sales Tax Fing Corp Sales Tax Rev |
PR
|
3.18 | |
Buckeye Ohio Tob Settlement Fing Auth |
OH
|
3.09 | |
Illinois St |
IL
|
2.67 | |
Florida Dev Fin Corp Surface Transn Fac Rev |
FL
|
2.64 | |
Chicago Ill |
IL
|
2.39 | |
New York Transn Dev Corp Spl Fac Rev |
NY
|
2.17 | |
New Jersey Economic Dev Auth Rev |
NJ
|
2.07 | |
Illinois Fin Auth Rev |
IL
|
1.68 | |
Top 10 Total (%) | 27.46 |
These are not recommendations to buy or to sell any security. Securities and holdings may vary.
Geographical Weightings (%) as of 03/31/21
-
State
% of Net Assets -
■
California
12.9 -
■
Illinois
12.5 -
■
New York
8.7 -
■
New Jersey
8.3 -
■
Florida
5.4 -
■
Ohio
4.8 -
■
Texas
4.7 -
■
Pennsylvania
3.9 -
■
Puerto Rico
3.8 -
■
Colorado
3.3 -
■
Wisconsin
2.8 -
■
Arizona
2.4 -
■
Alabama
2.0 -
■
Virginia
1.5 -
■
Maryland
1.4 -
■
Iowa
1.4 -
■
Washington
1.2 -
■
Michigan
1.2 -
■
Missouri
1.1 -
■
Minnesota
1.1 -
■
Other
15.6
Currency Exposure (%)
as of 03/31/21
-
U.S. Dollar
99.63 -
Other/Cash
0.37
Sector Weightings (%) as of 03/31/21
-
Sector
% of Net Assets -
■
Health Care
19.4 -
■
Industrial Revenue
16.4 -
■
Special Tax
11.2 -
■
Tobacco
10.5 -
■
Education
10.0 -
■
Local
8.3 -
■
Transportation
8.0 -
■
Leasing
7.6 -
■
State
2.8 -
■
Housing
2.8 -
■
Water & Sewer
2.0 -
■
Power
0.5 -
■
Cash
0.4 -
■
Solid Waste/Res Recovery
0.1
Credit Quality (%) as of 03/31/21
Composite | % of Net Assets | |
---|---|---|
Investment Grade | AAA | 0.04 |
BBB | 23.99 | |
Non-Investment Grade | BB | 21.90 |
B | 7.88 | |
CCC | 4.51 | |
Total Investment Grade | -- | 24.03 |
Total Non-Investment Grade | -- | 34.29 |
Not Rated | -- | 41.32 |
Maturity (%) as of 03/31/21
Average Portfolio Maturity: 20.68 Years