XMPT ETF

VanEck CEF Municipal Income ETF offers high tax-free yields by investing in closed-end funds focused on U.S. municipal bonds, leveraging unique discount opportunities. The XMPT ETF's 30-Day SEC Yield of 4.85% surpasses many competitors, driven by leverage and discounted CEF purchases, despite a higher expense ratio of 1.98%. The fund provides diversification across various municipal sectors, potential capital appreciation, and risk management, making it appealing for high-tax-bracket investors.

The XMPT ETF is a fund-of-funds of closed-end funds focusing on municipal bond investments. Municipal bonds have very high duration due to the long-term nature of their assets, hence municipal bond funds tend to be very sensitive to interest rates. Given my view that long-term interest rates may continue to rise or stay higher for longer, I advise avoiding the XMPT ETF.

The VanEck CEF Municipal Income ETF invests based on the S-Network Municipal Bond Closed-End Fund Index. Both the ETF and its index are reviewed in detail.  I also compare XMPT against both a set of municipal bond ETFs and CEFs. The added risk of investing in CEFs is shown when comparing XMPT against three other municipal bond "true" ETFs.