High yield munis generally offer the highest potential yields available in the municipal bond market.
Source: Van Eck Global. As of January 31, 2015. Please see below for important disclosures and definitions.
Over the last ten years, high yield municipal bonds have had significantly lower default rates than their taxable corporate counterparts.
Average cumulative rates from 1970-2013 (annualized). As of May 1, 2014.Source: Moody’s Investors Services; “U.S. Municipal Bond Defaults and Recoveries, 1970-2012”. Please see below for important disclosures and definitions.
A short-term high yield muni index currently yields only 0.80% less than an all-maturity index with less than half of the duration risk (or interest rate sensitivity). Additionally, short-term high yield munis generally had a similar yield and duration profile as high yield corporates, but on a taxable equivalent basis high yield corporate bonds would have needed to yield 6.36% to match what top earners would have received for short-term high yield munis.
In a rising interest rate environment, SHYD may provide competitive yields, reduced sensitivity to rising rates, and exposure to an asset class with historically low defaults.
Provide the following contact details and we’ll be in touch with you shortly to
schedule a call about SHYD.
† Source: Morningstar as of 1/31/15. Based on the average net expense ratio of all U.S.-listed municipal bond mutual funds of 0.91%, and Market Vectors municipal bond ETF average expense ratio of 0.27%. Actual expenses for Market Vectors municipal bond ETFs range from 0.20% to 0.35%. There may be other material differences between products that must be considered before investing. Comparison excludes Market Vectors CEF Municipal Income ETF (XMPT) because it holds municipal closed-end funds, not municipal bonds. XMPT’s net expense ratio is 1.65% and the impact would be lessened if XMPT had been included.
All data based on indices. Index performance is not illustrative of Fund performance. Fund performance current to the most recent month end is available by visiting marketvectorsetfs.com. Past performance does not guarantee future results.
Short Muni - The Barclays AMT-Free Short Continuous Municipal Index covers investment grade municipal bonds with a nominal maturity between 1-6 years. Intermediate Muni - The Barclays AMT-Free Intermediate Continuous Municipal Index covers investment grade municipal bonds with a nominal maturity between 6-17 years. Long Muni - The Barclays AMT-Free Long Continuous Municipal Index covers investment grade municipal bonds with a nominal maturity between 17+ years. (All Maturity) High Yield Muni - The Barclays Municipal Custom High Yield Composite Index covers high yield rated (75%) and BBB rated (25%) municipal bonds with a nominal maturity of 1+ years. Short-Term High Yield Muni - The Barclays Municipal High Yield Short Duration Index covers high yield rated (75%) and BBB rated (25%) municipal bonds with a nominal maturity between 1-10 years. High Yield Corps - The Barclays High Yield Corporate Bond Index covers high yield rated bonds from corporate issuers.
SHYD seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Barclays Municipal High Yield Short Duration Index. SHYD had no operating history prior to January 13, 2014.
Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. All durations represented by duration to worst which measures the duration of a bond computed using the bond’s nearest call date or maturity, whichever comes first. This measure ignores future cash flow fluctuations due to embedded optionality.
Yields represented by yield to worst. Yield to worst measures the lowest of either yield-to-maturity or yield-to-call date on every possible call date.
Municipal bonds are subject to risks including those related to litigation, legislation, political changes, local business or economic conditions, conditions in underlying sectors, bankruptcy or other changes in the financial condition of the issuer, and/or the discontinuance of the taxation supporting the project or assets, or the inability to collect revenues for the project or from the assets. Additional risks include: credit risk, interest rate risk, and call risk. High yield bonds may be subject to a greater risk of loss of income and principal, and are likely to be more sensitive to adverse economic changes than higher rated securities. Some portion of Fund distributions may be subject to the Alternative Minimum Tax (AMT).
The market for municipal bonds may be less liquid than for taxable bonds. Income from corporate bonds is subject to state and Federal tax. There is no guarantee that a Fund’s income will be exempt from federal or state income taxes. Federal or state changes in income or alternative minimum tax rates or in the tax treatment of municipal bonds may make them less attractive as investments and cause them to lose value. Capital gains, if any, are subject to capital gains tax. Please refer to the Funds’ prospectus for complete risk information.
The"Net Asset Value" (NAV) of a Market Vectors exchange-traded fund (ETF) is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Market Vectors ETF investors should not expect to buy or sell shares at NAV.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called "creation units" and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 888.MKT.VCTR or marketvectorsetfs.com/ . Please read the prospectus and summary prospectus carefully before investing.
Van Eck Securities Corporation, Distributor335 Madison AvenueNew York, NY 10017
© Van Eck Global. All rights reserved.