Standard & Poor’s, announced that it has expanded its family of municipal bond indices with the launch of the S&P Municipal Yield Index. The S&P Municipal Yield Index is a market value-weighted index that seeks to provide a measure of an investing strategy used in the municipal market that allocates a different percentage to bonds rated below investment grade and non-rated bonds than to bonds rated investment grade…..
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S&P Indices also announced that it has licensed SSgA to list and trade an Exchange Traded Fund (“ETF”) based upon the S&P Municipal Yield Index.
The S&P Municipal Yield Index, whose constituents are derived from Standard & Poor’s/Investortools Municipal Bond Index, incorporates a strategy of proportional investing in municipal bonds that typically have higher yields than other municipal bonds. To do so, 70% of the market value of the Index is allocated to high yield bonds, 20% to BBB rated bonds and 10% to A rated bonds. Both tax-exempt bonds and bonds subject to the Alternative Minimum Tax (AMT) are included in the Index.
“This addition to S&P’s municipal index family is designed to provide additional sets of performance and key characteristic data for the high yield municipal bond market as municipal issuers manage their budgets through the current economic cycle,” says JR Rieger, Vice President of Fixed Income Indices at S&P Indices.
Source: ETFWorld – Standard & Poor’s
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