Municipalities typically issue revenue bonds to allow cities to avoid hitting a legislated debt limit. Additionally, an agency that runs on tax dollars, like a school, cannot issue revenue bonds since the agency would be unable to pay off the bond using revenues from the project.
RVNU has a yield to worst of 2.95% and a modified duration of 6.40 years.
The muni ETF’s portfolio is filled with investment-grade debt securities, including Aaa 9.3%, Aa 45.5%, A 42.2% and BBB 2.4%.
Financial advisors who are interested in learning more about the municipal bond market can register for the Tuesday, March 30 webcast here.