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The Market Vectors® CEF Municipal Income ETF (XMPT) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the S-Newtork Municipal Bond Closed-End Fund Index (CEFMX). CEFMX is composed of shares of municipal closed-end funds listed in the United States that are principally engaged in asset management processes designed to produce federally tax exempt annual yield.
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Country: United States
- In Your Portfolio: Broad U.S. Bond ETFs, A Guide to Municipal Bond ETFs and Closed-End Funds
- Asset Class Performance: Bonds
Tuesday, Dec 1712:55 PM
Tuesday, Dec 1712:55 PM| 2 Comments
- The combination of credit issues and rising interest rates have municipal closed-end funds selling at near-record discounts (10%+) to net asset values, says Doug Kass, and at near-record pretax-equivalent yields vs. taxable bonds. Those conditions, says Kass, constitute a margin of safety and he's an owner of: NMA, NAD, ETX, BKN.
- Related ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, MLN, HYMB, CMF, BABZ, BABS, XMPT, SHM, SUB, PRB, SMB, PZT, NYF, CXA, PWZ, PVI, SMMU, MUAF, INY, MUAD, MUAG, MUAE, VRD, MUAC, GMMB, RVNU
Wednesday, Dec 114:56 AM
Wednesday, Dec 114:56 AM| Comment!
- States' revenues are projected to increase 0.8% in FY 2014 - which began in October - sharply down from a 5.7% rise in FY 2013, the National Association of State Budget Officers says.
- Major reasons for the slowdown include tax cuts and a one-time surge in revenue last year following a change in federal laws.
- Spending is poised to rise 3.6% vs 4.3% a year earlier, with both increases below the historical average growth rate of 5.6%.
- The level of "rainy day funds" for emergency spending will decline to $56.7B in states that have passed their budgets from $67B. Hiring is not expected to increase. (PR)
- Muni ETFs: MUB, HYD, PZA, MUNI, TFI, ITM, MLN, HYMB, XMPT, SHM, SUB, PRB, SMB, PVI, SMMU, VRD, GMMB, RVNU
Wednesday, Dec 42:52 AM
Wednesday, Dec 42:52 AM| 7 Comments
- Illinois' Senate and House have approved a revamp of the state's retirement system, one of the most underfunded in the country with a gap of almost $100B.
- The plan is designed to fully fund Illinois' five pension systems by 2044 by saving an estimated $160B over 30 years. Workers and retirees face cuts, the retirement age for younger staff will rise, and the state will increase its payments by $60-70B.
- Unions are strongly opposed to the proposals and intend to go to court to stop them from being enacted. One argument is that the overhaul violates the state constitution by lowering pension benefits.
- Still, the Illinois revamp could provide a template for municipalities that are grappling with similar problems. Chicago, which has a pension shortfall of $19.5B, has been watching the situation with interest. (Previous)
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, MLN, HYMB, BABZ, XMPT, BABS, SHM, SUB, PRB, SMB, PVI, SMMU, MUAF, MUAE, MUAD, MUAG, VRD, MUAC, GMMB, RVNU
Tuesday, Dec 33:16 PM
Tuesday, Dec 33:16 PM| 1 Comment
- Municipals are "a credit market with a rates problem," says Morgan Stanley's Michael Zezas, seeing a base case (60% probability) of total returns of -1.7% to -4.1% in 2014. The bulk of the negative returns should come early, he says, thanks to the 10-year Treasury yield rising to 3.45%.
- The bull case - in which the economy slows and the 10-year yield slides to 2.3% - has munis returning between 3.5% and 6%. The bear case - growth jumps and the 10-year rises above 4% - sees losses of 6.2% to 10%.
- When to jump in? When "loss cushions outpace expected rate increases," he says, and when "market duration has extended."
- Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, BABZ, XMPT, BABS, SHM, SUB, PRB, PZT, SMB, NYF, CXA, PWZ, PVI, SMMU, MUAF, INY, MUAD, MUAG, MUAE, VRD, MUAC, GMMB, RVNU
Tuesday, Dec 311:50 AM
Tuesday, Dec 311:50 AM| 25 Comments
- Rejecting calls to dismiss the case, a Detroit judge finds the city acted in good faith when it filed for Chapter 9 bankruptcy. The city, he rules, could not have negotiated in good faith with its creditors without the filing. Pensions are unsecured creditors, says the judge, and thus not protected from potential cuts.
- Assured Guaranty (AGO +0.4%), Ambac (AMBC -1.1%), and MBIA (MBI -0.1%) have all fallen about 1% since the ruling.
- The unions and pension funds are likely to appeal the decision.
- “It is indeed a momentous day,” says the judge, Steven Rhodes. “We have here a judicial finding that this once proud city cannot pay its debts. At the same time, it has an opportunity for a fresh start. I hope that everybody associated with the city will recognize that opportunity.”
- Municipal bond ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, BABZ, BABS, XMPT, SHM, SUB, PRB, PZT, SMB, NYF, CXA, PWZ, PVI, SMMU, MUAF, INY, MUAD, MUAG, MUAE, VRD, MUAC, GMMB, RVNU
Tuesday, Dec 33:14 AM
Tuesday, Dec 33:14 AM| 2 Comments
- U.S. Bankruptcy Judge Steven Rhodes is due to decide today on whether Detroit is eligible for bankruptcy protection.
- Should Rhodes approve Detroit's request, the city would be protected from lawsuits in several courts, including over a plan to cut retiree benefits. It would also prevent creditors from suing to seize assets after Detroit defaulted on loan payments.
- Meanwhile, Illinois' House and Senate are set to vote on a proposed overhaul of the state's retirement system, one of the most underfunded in the country with a gap of almost $100B.
- The measures would save an estimated $160B over 30 years with cuts for workers and retirees but would fully fund the state's five pension systems by 2044. However, unions are deeply opposed to the legislation and its passage is not certain.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, BABZ, BABS, XMPT, SHM, SUB, PRB, SMB, PVI, SMMU, MUAF, MUAG, MUAE, MUAD, MUAC, VRD, GMMB, RVNU
Thursday, Nov 284:59 AM
Thursday, Nov 284:59 AM| 38 Comments
- After two years, Illinois' legislative leaders have finally reached a deal to overhaul the state's retirement system, one of the most underfunded in the country with a gap of almost $100B.
- However, details of the plan weren't provided.
- The proposal must win approval from the House and Senate in votes that are due to take place on Tuesday; however, authorization is by no means assured, especially with unions expected to provide vehement opposition.
- Chicago, which has a pension shortfall of $19.5B, is watching the situation with interest.
- ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, MLN, HYMB, BABZ, BABS, XMPT, SHM, SUB, PRB, SMB, SMMU, PVI, VRD, GMMB, RVNU
Tuesday, Nov 263:31 AM
Tuesday, Nov 263:31 AM| 3 Comments
- California state Judge Michael Kenny has blocked the California High-Speed Rail Authority from issuing over $8B in bonds to help fund the proposed high-speed rail line from San Francisco to Los Angeles.
- In explaining his action, Kenny said the authority's finance committee hadn't properly disclosed its reasons for authorizing the debt.
- The decision could cause delays and increase the costs of the $68B project, which has been losing public support.
- ETFs: MUB, BAB, PZA, MUNI, TFI, ITM, MLN, CMF, BABZ, BABS, XMPT, SHM, SUB, PRB, SMB, CXA, PWZ, SMMU, PVI, VRD, GMMB, RVNU
Wednesday, Nov 203:39 AM
Wednesday, Nov 203:39 AM| Comment!
- Jefferson County in Alabama has become the first municipality to successfully tap the bond markets while still in bankruptcy protection, selling $1.8B in sewer warrants.
- However, Jefferson will reportedly have to pay up to 6.85% in interest on the debt, which has a maturity as long as 40 years.
- The county is now due to go to court today to seek authorization to exit bankruptcy by the year-end.
- ETFs: MUB, HYD, PZA, MUNI, TFI, ITM, HYMB, MLN, XMPT, SHM, SUB, PRB, SMB, SMMU, PVI, MUAF, MUAG, MUAE, MUAD, MUAC, VRD, GMMB, RVNU
Tuesday, Nov 194:38 AM
Tuesday, Nov 194:38 AM| Comment!
- Just over two thirds of metropolitan areas will grow in 2013, a report from IHS Global Insight has forecast.
- However, that means that 119 out of the 363 regions studied will stay the same or decline, said the report, which was prepared for mayors. The figure is worse than the 73 areas that didn't expand last year.
- Of the cities that are doing well, Midland in Texas is expected to perform the best with growth of 7.3%. Odessa, also in Texas, is seen expanding 6.4%.
- Municipal ETFs: MUB, HYD, PZA, MUNI, TFI, ITM, HYMB, MLN, XMPT, SHM, SUB, PRB, SMB, SMMU, PVI, VRD, GMMB, RVNU
Monday, Nov 119:06 AM
Monday, Nov 119:06 AM| Comment!
- "The downgrade reflects the lack of meaningful solutions to both the near- and long-term (pension) burden," says Fitch, cutting Chicago's unlimited tax general obligation bonds to A- from AA-, and keeping the outlook Negative. This affects more than $8.5B of debt.
- To review: This general obligation debt is secured by the city's full faith and credit and (theoretically) nearly-unlimited power to tax.
- Fitch notes improvement in the government budget, but that the pension woes overshadow this. There's also the sluggish recovery in the Midwest - "high unemployment persists and property tax base recovery has been elusive."
- Muni ETFs: MUB, HYD, BAB, PZA, MUNI, TFI, ITM, HYMB, MLN, CMF, BABZ, BABS, XMPT, SHM, SUB, PRB, PZT, SMB, NYF, CXA, PWZ, SMMU, PVI, MUAF, INY, MUAD, MUAG, MUAE, VRD, MUAC, GMMB, RVNU
Monday, Nov 114:36 AM
Monday, Nov 114:36 AM| 3 Comments
- The city of Desert Hot Springs in California could file for Chapter 9 after it projected FY revenue of $13.9M, $2.7M less than budgeted.
- The city, whose population is 26,000, will run out of cash on March 31.
- Amy Aguer, the interim director of finance and administration, has urged Desert Hot Springs' council to declare a fiscal emergency, a prerequisite for a Chapter 9 filing. An alternative to bankruptcy protection could be disincorporation.
- Should Desert Hot Springs apply for Chapter 9, it would become the fourth Californian city to do so since June last year, the others being San Bernardino, Stockton and Mammoth Lakes.
- ETFs: MUB, PZA, MUNI, TFI, ITM, MLN, CMF, XMPT, SHM, SUB, PRB, SMB, CXA, PWZ, SMMU, PVI, VRD, GMMB, RVNU
Friday, Nov 83:20 PM
Friday, Nov 83:20 PM| 1 Comment
- Assured Guaranty (AGO +2.7%) and MBIA's (MBI +1.3%) municipal insurance unit National Public Finance Guarantee sue Detroit over using property tax money earmarked to pay general obligation bonds, and ask the judge overseeing the city's bankruptcy petition to force the city to set the cash aside.
- Emergency manager Kevyn Orr has upset municipal bond markets by including more than $400M of GO bonds in Detroit's nearly $12B of "unsecured" debt. The October 1 default triggered most of a $9.37M interest payment due on that paper to have to be made by Assured and National.
- The lawsuit also raises the insurers' concern about the $350M debtor-in-financing deal Detroit reached with Barclays in October. They want the court to prohibit the city from giving any creditor "super-priority status" in which those property tax payments again may be diverted from the GO bonds.
- The next payment due on the bonds - $47.6M - is due on April 1.
- Also keeping an eye on the proceedings is Ambac (AMBC).
- Muni ETFs: MUB, PZA, MUNI, TFI, ITM, MLN, XMPT, SHM, SUB, PRB, SMB, SMMU, PVI, VRD, GMMB, RVNU
Monday, May 2012:30 PMThe hot market for corporate junk (HYG, JNK) has pushed the yield on high-yield corporates (4.88%) well below that of high-yield municipals (5.22% nominally, over 8% on a tax-equivalent basis). The nominal spread of 34 bps is down from 56 bps a week ago as investors take notice of the anomaly. High-yield muni ETFs: HYD, HYMB, XMPT. |Monday, May 2012:30 PM| 4 Comments