Deutsche X-Trackers Municipal Infrastructure Revenue Bond Fund (NYSEArca: RVNU)
30-day SEC Yield: 2.86%
Comment: On the surface, a municipal bond ETF may not fit the bill as a “unique” source of ETF yield. However, RVNU’s approach to the municipal bond space is in fact unique.
The recent swings in the munis market are attributed to the high-profile bankruptcy filings in Detroit, Michigan and Stockton, California, along with financial problems in Puerto Rico. Specifically, general-obligation bonds, which are backed by credit and the taxing ability of the issuing municipality, are under increased scrutiny as some cities fail to generate enough tax revenue to cover their debt. [A Different Way to Muni ETFs]
RVNU skirts that problem by focusing solely on bonds that fund federal, state and local infrastructure projects such as water and sewer systems, public power systems, toll roads, bridges, tunnels, and many other public use projects where the interest and principal repayments are generated from dedicated revenue sources.
ETF Trends editorial team contributed to this post.