The state of Florida is getting ready to utilize the issuance of municipal bonds in order to further its agenda of boosting the private space-launch industry. This throws the spotlight on fixed income investors who haven’t yet allocated their exposure to municipal bond exchange-traded funds (ETFs).
Per a Bond Buyer report, “Gov. Ron DeSantis signed legislation in late June enabling Space Florida, the state’s aerospace economic development agency, to bypass approval from the governor and cabinet to issue revenue bonds for private companies pursuing capital projects. The bill’s sponsor, Sen. Tom Wright, R-New Smyrna Beach, said the law provides Space Florida with the same streamlined bonding process afforded to other governmental entities and will foster a more competitive marketplace for the state’s space industry.”
“Space Florida has done a tremendous job in attracting companies to our state,” Wright said in a statement. “From this bill’s passage, they will be able to conduct business and save costs for all involved parties, while ensuring the state of Florida is not on the hook when it comes to issuing bonds.”
“This legislation clarifies and simplifies the process for Space Florida to utilize its bonding authority to further grow the aerospace industrial capacity in Florida,” Ketcham said. “The financing tool kit of Space Florida is akin to a commercial enterprise as it is not backed by the full faith and credit of the State of Florida. This recent legislation removed potential ambiguity on that issue.”
Investors looking to get exposure to munis without purchasing the actual debt can do so via exchange-traded funds (ETFs) like the Xtrackers Municipal Infrastructure Revenue Bond ETF (RVNU). RVNU seeks investment results that correspond generally to the performance of the Solactive Municipal Infrastructure Revenue Bond Index that’s comprised of tax-exempt municipal securities issued by states, cities, counties, districts, their respective agencies, and other tax-exempt issuers.
Here are a couple more muni bond ETFs to consider:
- VanEck Vectors AMT-Free Long Municipal Index ETF (MLN): seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Bloomberg Barclays AMT-Free Long Continuous Municipal Index. The index is comprised of publicly traded municipal bonds that cover the U.S. dollar-denominated long-term tax-exempt bond market.
- Franklin Liberty Municipal Bond ETF (FLMB): seeks a high level of current income that is exempt from federal income taxes. Although the fund tries to invest all of its assets in tax-free securities, it is possible that up to 20% of the fund’s net assets may be in securities that pay interest that may be subject to the federal alternative minimum tax and, although not anticipated, in securities that pay interest subject to other federal or state income taxes.
For more relative market trends, visit ETF Trends.