Van Eck Global has launched the first high-yield municipal bond ETF.
The Market Vectors High-Yield Municipal Index ETF (HYD) is the first ETF to focus on the high-yield segment of the municipal bond market.
The new ETF has several advantages over traditional mutual funds and closed end funds that focus on the municipal bond market. In addition to portfolio and price transparency, HYD does not use leverage and carries a net expense ratio of only 0.35%.
HYD tracks an index that has a 25% weighting in investment-grade triple-B bonds and a 75% weighting in below-investment grade bonds.
As of December 31, 2008, the sector weightings were 21.4%, 14.7%, 13.5% and 13.5% to health care, industrial development, special tax and airports respectively.
Exposure to California was 12.3% as of February 9, 2009.
See the Van Eck Global ETF Directory for a complete listing.