Van Eck Global has launched the Market Vectors CEF Municipal Income ETF (ticker: XMPT), which it says is the first exchange-traded fund to focus on closed-end municipal bond funds.
The fund is benchmarked against the S-Network Municipal Bond Closed-End Fund Index, which assigns a greater weight to closed-end funds trading at discounts.
“Investors and their advisers have long been attracted to tax-exempt closed-end funds that can offer attractive yields and, in some cases, sell at a discount to the underlying value of the portfolio assets,” said Jan van Eck, a principal at the firm. “XMPT’s index is well-diversified by credit, strategy and manager, focusing on higher-quality assets, and designed to take advantage of closed-end funds’ tendency to trade at a discount. In the past, investors have long had to weigh these factors for themselves when investing in closed-end funds. Now, it is possible to build a diversified, highly liquid position in multiple CEFs by owning shares in a single ETF.”
XMPT is Van Eck’s 35th Market Vectors ETF and its ninth fixed income ETF.