5 min readBy Ron Koren ETF Insider
How does the HYMB ETF work?
The HYMB ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The HYMB issuer, managed by State Street Global Advisors (SSGA), aims to mirror the performance of the Bloomberg Municipal Yield Index through a sampling strategy, allowing flexibility in selecting securities. Nuveen Asset Management, acting as the investment sub-adviser, makes decisions on asset allocation based on factors like fund size. Under normal conditions, the fund primarily invests in securities from the Index, with at least 80% of assets in tax-exempt instruments. Besides Index securities, it may invest in similar instruments, cash equivalents, or money market funds. The Index itself comprises high-yield municipal bonds issued by various US entities, with different credit ratings and issuance criteria. Managed by Bloomberg Index Services Limited, the Index's composition is regularly updated, with rebalancing occurring monthly. As of July 31, 2023, the Index included 18,440 securities. This approach allows the HYMB issuer to pursue its objective while maintaining diversification and managing risk.
The HYMB Dividend, overseen by State Street Global Advisors, seeks to provide investors with a dividend reflecting the performance of the Bloomberg Municipal Yield Index. Employing a strategy of sampling, the fund selects a subset of securities from the Index to construct a portfolio with similar risk and return characteristics. Nuveen Asset Management, acting as the investment sub-adviser, determines the asset allocation, considering factors such as fund size. Under normal market conditions, the fund typically invests the majority, if not all, of its assets in securities from the Index, ensuring exposure to U.S. dollar-denominated high-yield municipal bonds issued by various governmental entities. Additionally, the fund aims for at least 80% of its net assets, including borrowed funds, to be invested in tax-exempt instruments. This strategy allows the HYMB Dividend to provide investors with regular income while maintaining a diversified portfolio aligned with its investment objectives.
The HYMB Tracking fund, managed by State Street Global Advisors, endeavors to replicate the performance of the Bloomberg Municipal Yield Index through a meticulous tracking strategy. Utilizing a sampling approach, the fund strategically selects a subset of securities from the Index to construct a portfolio that closely mirrors the risk and return characteristics of the benchmark. Nuveen Asset Management, serving as the investment sub-adviser, employs its expertise to determine the optimal asset allocation, taking into account various factors including the fund's size. Under normal market conditions, the majority, if not all, of the fund's total assets are invested in securities comprising the Index, ensuring strong alignment with the benchmark's composition. Furthermore, the fund aims to allocate at least 80% of its net assets, augmented by borrowing for investment purposes, into tax-exempt investments, fostering a tax-efficient investment strategy. By consistently monitoring and adjusting its holdings to match the Index, the HYMB Tracking fund aims to provide investors with a high degree of correlation to the benchmark's performance while maintaining diversification and managing risk effectively.
The HYMB Correlation fund, overseen by State Street Global Advisors, is designed to closely correlate with the performance of the Bloomberg Municipal Yield Index through a correlation-focused strategy. Employing a meticulous approach, the fund strategically selects securities from the Index using a sampling technique to construct a portfolio that mirrors the risk and return characteristics of the benchmark. Nuveen Asset Management, acting as the investment sub-adviser, utilizes its expertise to determine the optimal asset allocation, considering various factors such as the fund's size and market conditions. Under typical market conditions, the fund invests predominantly in securities comprising the Index, ensuring strong alignment with the benchmark's composition. Additionally, the fund aims to allocate at least 80% of its net assets, including borrowed funds, into tax-exempt investments, contributing to a tax-efficient investment strategy. By closely monitoring and adjusting its holdings to match the Index, the HYMB Correlation fund seeks to provide investors with a high degree of correlation to the benchmark's performance, thereby offering a reliable investment option for those seeking exposure to the municipal bond market.
The HYMB Sector fund, managed by State Street Global Advisors, specializes in sector-focused investments within the municipal bond market, aiming to align with the Bloomberg Municipal Yield Index. Utilizing a sector-focused strategy, the fund strategically selects securities from the Index using a sampling approach to construct a portfolio that reflects the specific industry or group of industries represented in the benchmark. Nuveen Asset Management, serving as the investment sub-adviser, employs its expertise to determine the optimal asset allocation, considering factors such as sector trends and market conditions. Under typical market conditions, the fund invests predominantly in securities representing specific sectors within the municipal bond market, while also ensuring diversification across industries. Additionally, the fund aims to allocate at least 80% of its net assets, including borrowed funds, into tax-exempt investments, promoting a tax-efficient investment strategy. By closely monitoring sector trends and adjusting its holdings accordingly, the HYMB Sector fund seeks to provide investors with exposure to targeted sectors within the municipal bond market while maintaining alignment with the broader benchmark's performance.
The HYMB Exposure fund, managed by State Street Global Advisors, is dedicated to providing investors with targeted exposure to specific segments of the municipal bond market, in alignment with the Bloomberg Municipal Yield Index. Employing a focused exposure strategy, the fund strategically selects securities from the Index using a sampling technique to construct a portfolio that reflects the desired exposure within the market. Nuveen Asset Management, acting as the investment sub-adviser, utilizes its expertise to determine the optimal asset allocation, considering factors such as market trends and investment objectives. Under typical market conditions, the fund invests predominantly in securities representing the desired exposure within the municipal bond market, ensuring diversification across different segments. Additionally, the fund aims to allocate at least 80% of its net assets, including borrowed funds, into tax-exempt investments, fostering a tax-efficient investment approach. By closely monitoring market dynamics and adjusting its holdings accordingly, the HYMB Exposure fund seeks to provide investors with targeted exposure to specific segments of the municipal bond market while aligning with the broader benchmark's performance.
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