An ETF for Lower Risk in Municipal Bond Portfolios
January 29th at 7:30am by Max Chen
Municipal bond investors are concerned about default risk following the Detroit fiasco. However, a muni infrastructure exchange traded fund skirts the issue by investing in revenue generating projects.
ETF Trends’ Tom Lydon recently sat down with Christian Wagner, CEO of Longview Capital Management, to discuss how the db X-Trackers Municipal Infrastructure Revenue Bond Fund (NYSEArca: RVNU) has helped reduce risk in a municipal fixed-income portfolio.
RVNU is the first ETF to focus exclusively on revenue bonds, or munis that are supported by revenue from projects such as toll roads or bridges. [Advisors Like the New Spin on Muni Bond ETFs]
“This particular ETF fits a very, very unique profile and dials down a lot of the risk we don’t want to have as municipal investors,” Wagner said.
Specifically, the ETF does not include GO, or general obligation, bonds, which are backed by the credit and taxing ability of a city or state – the type of muni debt that came under heavy scrutiny after Detroit’s bankruptcy filing.
Watch the video below to see the full interview with Christian Wagner.
To view past video interviews, visit our video section.