State Street Global Advisors today announced the launch of the SPDR Nuveen Municipal Bond ESG ETF (MBNE), an actively managed ETF sub-advised by Nuveen. The ETF begins trading today on the Cboe BZX Exchange.
MBNE is designed to invest in municipal securities from issuers that are leaders in their sector in delivering environmental, social, and governance outcomes or whose proceeds are used towards positive environmental or social projects.
“The prospect of higher taxes coupled with rising uncertainty surrounding future interest rate hikes have increased demand for actively managed municipal bond ETFs,” said Brie Williams, head of practice management at SSGA, in a news release. “At the same time demand for municipal bond exposure is growing, investors are increasingly looking beyond equities for ESG exposure, which is why we’re excited about the expansion of our SPDR ETF municipal bond lineup and the partnership we’ve built with Nuveen to launch MBNE.”
Nuveen municipal portfolio managers Tim Ryan, Shawn O’Leary, and David Blair will leverage Nuveen’s ESG Municipal Bond Scoring Tool to select bonds from issuers that are leaders in environmental stewardship, strong governance, and positive social outcomes. The strategy will primarily consist of investment-grade, tax-exempt municipal securities ranging from two to 17 years in maturity issued by U.S. municipalities. To identify potential municipal bonds for investment, Nuveen uses a value-oriented strategy designed to identify higher-yielding and undervalued municipal bonds that offer above-average total return potential.
“As investors become more familiar with ESG-integrated strategies, Nuveen has created a proprietary framework that is designed to identify the municipal bond issuers that support income generation for investors and achieve positive ESG outcomes in their communities,” added Ryan in the release. “The fund is also designed to provide exposure to bonds whose proceeds are used towards positive environmental or social projects addressing critical issues including climate change, environmental degradation, inequality, poverty, and justice and are aligned with the UN Sustainable Development Goals.”
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