State Street Global Advisors Expands Fixed Income ETF Offering with Its First Actively Managed Municipal Bond ETF

Rhea-AI Summary

State Street Global Advisors has launched the SPDR Nuveen Municipal Bond ETF (MBND), an actively managed ETF aimed at optimizing tax-exempt income through identified undervalued municipal bonds. In collaboration with Nuveen, the ETF seeks to balance current income with capital appreciation using a value-oriented strategy. The fund targets a weighted average duration of 4.5 to 7 years and aims for above-average returns while maintaining a gross expense ratio of 0.40%. This initiative reflects an effort to offer investors yield opportunities in a low-interest environment.

Positive

• Launch of SPDR Nuveen Municipal Bond ETF (MBND) expands State Street's ETF offerings.
• Actively managed approach targets undervalued municipal bonds for potential higher yields.
• ETF designed to generate tax-exempt income and capital appreciation.
• Gross expense ratio of only 0.40% offers cost-effective investment.

Negative

• Investment risks associated with fluctuating market values and interest rates.
• Dependence on local political and economic conditions affecting municipal obligations.

State Street Global Advisors, the asset management business of State Street Corporation (NYSE: STT), today announced the launch of the SPDR Nuveen Municipal Bond ETF (MBND). Developed by State Street Global Advisors and Nuveen, the global investment manager of Teachers Insurance and Annuity Association of America (“TIAA”), MBND is an actively managed ETF that enhances the SPDR municipal bond ETF suite, which currently comprises three index-based ETFs - SPDR Nuveen Bloomberg Barclays Municipal Bond ETF (TFI), SPDR Nuveen Bloomberg Barclays High Yield Municipal Bond ETF (HYMB), and SPDR Nuveen Bloomberg Barclays Short Term Municipal Bond ETF (SHM).

“We’re excited to expand our relationship with Nuveen, a recognized leader in municipal bond investing, by offering a fund that aims to identify undervalued opportunities in the muni bond market and generate tax-exempt income,” said Sue Thompson, head of SPDR Americas Distribution at State Street Global Advisors. “Given the challenges facing fixed income investors after more than a decade of falling interest rates, we believe an actively managed municipal bond ETF can add value to client portfolios.”

The SPDR Nuveen Municipal Bond ETF seeks to provide current income that is exempt from federal income taxes. Capital appreciation is a secondary objective when consistent with MBND’s primary objective. In selecting securities for MBND, Nuveen utilizes a rules-based, value-oriented strategy designed to identify higher-yielding and undervalued municipal bonds that offer above-average total return potential. This approach combines top-down duration, sector, and credit quality guidance provided by Nuveen’s investment committee with deep credit research from one of the industry’s largest teams.

The ETF targets a weighted average duration between 4.5 and 7 years and a weighted average maturity between 5 and 12 years. MBND is managed by Timothy Ryan and Steven Hlavin, portfolio managers at Nuveen, and has a gross expense ratio of 40 basis points (0.40%).

“As the search for yield continues to be top of mind for investors in the current low-rate environment, recent monetary policy and liquidity support may create significant tailwinds for municipal bonds,” said Timothy Ryan, portfolio manager and managing director at Nuveen. “We think an actively managed municipal strategy offers investors an opportunity to generate additional yield from the key tax benefits offered by municipal investments.”

SSGA Funds Management, Inc. serves as investment adviser to MBND and Nuveen Asset Management, LLC serves as investment sub-adviser to MBND.

For more information on the SPDR ETF suite, visit www.ssga.com/etfs.

About Nuveen

Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $1.2 trillion in assets under management as of 31 Dec 2020 and operations in 27 countries. Its investment specialists offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.

About SPDR Exchange Traded Funds

SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are sponsored by affiliates of State Street Global Advisors. The funds provide investors with the flexibility to select investments that are aligned to their investment strategy. For more information, visit www.ssga.com/etfs.

About State Street Global Advisors

For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of active and index strategies to create cost-effective solutions. As stewards, we help portfolio companies see that what is fair for people and sustainable for the planet can deliver long-term performance. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world’s third-largest asset manager with US $3.47 trillion* under our care.

*This figure is presented as of December 31, 2020 and includes approximately $75.17 billion of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.

Important Risk Disclosures

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

MBND’s investments are subject to changes in general economic conditions, general market fluctuations and the risks inherent in investment in securities markets.

The values of debt securities may increase or decrease as a result of the following: market fluctuations, changes in interest rates, actual or perceived inability or unwillingness of issuers, guarantors or liquidity providers to make scheduled principal or interest payments or illiquidity in debt securities markets; the risk of low rates of return due to reinvestment of securities during periods of falling interest rates or repayment by issuers with higher coupon or interest rates; and/or the risk of low income due to falling interest rates.

The values of municipal obligations may be adversely affected by local political and economic conditions and developments. In addition, the values of municipal obligations that depend on a specific revenue source to fund their payment obligations may fluctuate as a result of actual or anticipated changes in the cash flows generated by the revenue source or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source. In addition, changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal obligations and may result in a significant decline in the values of such municipal obligations.

MBND is actively managed. The sub-adviser’s judgments about the attractiveness, relative value, or potential appreciation of a particular sector, security, commodity or investment strategy may prove to be incorrect, and may cause the fund to incur losses. There can be no assurance that the sub-adviser’s investment techniques and decisions will produce the desired results.

Standard & Poor's®, S&P® and SPDR® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC (SPDJI) and sublicensed for certain purposes by State Street Corporation. State Street Corporation’s financial products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and third party licensors and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index.

Distributor: State Street Global Advisors Funds Distributors, LLC, member FINRA, SIPC, an indirect wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. Certain State Street affiliates provide services and receive fees from the SPDR ETFs.

SSGA Funds Management, Inc. has retained Nuveen Asset Management as the investment sub-adviser to the fund. State Street Global Advisors Funds Distributors, LLC is not affiliated with Nuveen Asset Management.

Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-787-2257 or visit www.ssga.com. Read it carefully.

© 2021 State Street Corporation.

All Rights Reserved.

3420459.1.1.AM.RTL      Exp. Date: 01/31/2022

Not FDIC Insured      No Bank Guarantee     May Lose Value

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FAQ

What is the SPDR Nuveen Municipal Bond ETF (MBND)?

The SPDR Nuveen Municipal Bond ETF (MBND) is an actively managed fund that aims to identify undervalued municipal bonds to provide tax-exempt income and potential capital appreciation.

What investment strategy does MBND use?

MBND employs a rules-based, value-oriented strategy to select higher-yielding municipal bonds while balancing duration and credit quality.

Who manages the SPDR Nuveen Municipal Bond ETF?

The ETF is managed by Timothy Ryan and Steven Hlavin from Nuveen.

What is the expense ratio of MBND?

The SPDR Nuveen Municipal Bond ETF has a gross expense ratio of 0.40%.

How does MBND address the current low-rate environment?

MBND is designed to offer investors opportunities for yield generation through its actively managed strategy, capitalizing on recent monetary policy and liquidity trends.