Yields are low across the fixed income spectrum and municipal bonds aren’t being spared. The positive is that bond prices are appreciating, but when yields get too low, investors are often compelled to embrace riskier fixed income assets.
Investors looking for high yields with some protection and tax benefits in the municipal bond universe have a friend in the VanEck Vectors High Yield Muni ETF (HYD). HYD, which tracks the Bloomberg Barclays Municipal Custom High Yield Composite Index, sports a 30-day SEC yield of 2.17%. That’s not the high yield investors are accustomed to with junk-rated corporates, but it’s well in excess of standard muni benchmarks.
HYD isn’t just about yield. More speculative munis are outperforming their investment-grade counterparts, and improving state finances support the case for this asset class.
etftrends.com
by TOM LYDON
AUGUST 10, 2021