Van Eck Global will soon unveil an addition to its current municipal exchange-traded fund lineup, as the firm has filed with the Securities and Exchange Commission to launch the Market Vectors Short High-Yield Municipal Index ETF.
Van Eck currently sponsors six municipal bond ETFs, including the Market Vectors High-Yield Municipal Index ETF (ticker: HYD), which totals nearly $804 billion, as well as the $159 million Market Vectors Short Municipal Index ETF (ticker: SMB).
Since the fund is still in the registration process, the firm could not provide any specifics about its newest ETF offering, according to Jim Colby, chief municipal strategist and portfolio manager at Van Eck.
Though few details are available, such as its official launch date, expense ratio or ticker symbol, it will reportedly track Barclay’s short high-yield index, which comprises publicly traded municipal bonds that cover the U.S. dollar-denominated high-yield, short-term tax-exempt bond market.
In addition, it will use a sampling strategy, which means it will not include all of the issues in the index.
“This will be an addition to our suite of muni ETFs, and as is typical of Van Eck, we look to provide access to market segments which represent strategic opportunities for investors,” Colby said on Wednesday.
Colby said that in a routine filing, the process can be as short as 75 days, barring any issues from the SEC, but added he could not comment on the expected launch date.
Meanwhile, the firm has been tapping into many different avenues of the overall high-yield market in recent months in an attempt to offer investors attractive opportunities, and this could be part of that effort as long-term municipal yields are at historic lows, and short cash alternatives, like tax-exempt money market funds, are posting sub-zero levels.
For instance, back in April, the firm launched the International High-Yield Bond ETF, followed by the May launch of the Emerging Markets High-Yield Bond ETF.
In launching those funds, Van Eck officials said in separate press releases that underexposure to global high-yield debt among investors was a factor in creating the international ETF, while tapping into the recent growth and high-yield opportunities, as well as low default rates, was a force behind the launch of the emerging markets high-yield industry.
