Van Eck unveils muni fund

Van Eck Global, an asset management firm based in New York, has launched a high-yield municipal bond exchange traded fund, the Market Vectors High-Yield Municipal Fund (HYD). The investment “may be of potential interest to investors looking to augment their tax-free income through investments in high-yield municipal obligations, particularly since it offers compelling benefits when compared to individual bond purchases and traditional fund platforms,” Jan van Eck, principal of the firm, said in a release. Although high-yield municipal bonds have experienced sharp price declines in the current market, their current prices relative to historical default rates “suggest considerable value,” Mr. van Eck said in the release. The Market Vectors fund attempts to replicate the price and yield of the Barclays Capital Municipal Custom High-Yield Composite Index (LMEHTR) before fees and expenses. The index maintains a 25% weighting in investment-grade triple-B bonds and a 75% weighting in below-grade bonds. It provides exposure to a diverse array of high-yield municipal bond sectors, including health care, industrial development, special tax and airports. HYD is the fifth municipal bond ETF in the Market Vectors lineup.