How Muni ETFs in a Portfolio Can Open up Possibilities

VanEck Muni ETFs for Incremental Income

XMPT is included in both tables due to its unusual characteristics; because the leveraged closed-end funds in which it invests are generally over-collateralized, exposure to credit risk may be greatly reduced. However, because of the leverage employed by the underlying funds, there is greater interest rate risk. Prudent investors might use it for a portion of the long duration part of the core of their portfolios or to supplement or supplant their high yield allocation.


Because of the changes and challenges in the municipal bond market and the exchange-traded liquidity available via ETFs, even experienced investors may find that they can more easily tailor a diversified portfolio with a mix of muni ETFs than with individual bonds.


Post Disclosure

Patrick Luby is a Fixed Income Portfolio Strategy Specialist and the author of He has been helping many of the industry’s best advisors and their investor clients understand and navigate the municipal bond market since the weekly Bond Buyer Municipal Bond Index was at 9.48%.

This is not a recommendation to buy, sell, or hold any of the securities or strategies mentioned. The author does not provide investment, tax, legal, or accounting advice. Investors should consult with their own advisor and fully understand their own situation when considering changes to their strategy, tactics, or individual investments.