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S&P High Yield Municipal Bond ETF (HYMB) Hits New 52-Week High

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For investors seeking momentum, SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB - Free Report) is probably on radar now. The fund just hit a 52-week high, which is up roughly 7.4% from its 52-week low price of $54.65/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.

HYMB in Focus    

HYMB provides exposure to the U.S. high yield municipal bond market.  Interest on the securities is exempt from federal income tax. The product has 638 bonds in its portfolio. It charges investors 45 basis points in fees (see all Municipal Bond ETFs here).

Why the Move?

Municipal bonds are great picks for investors seeking a steady stream of tax-free income. Usually the interest income from munis is exempted from federal tax, making these especially attractive to investors in the high tax bracket looking to reduce their tax liability.

Plus, with long-term U.S. Treasury yields at subdued levels, the flair for muni bond investing has surged lately. This ascent in HYMB was noticed despite the debt crisis in Puerto Rico where the fund invests about 9% of assets.

More Gains Ahead?

Though the operating environment for this high-yield muni bond ETF is not favorable at the current level, the fund has a positive weighted alpha of 4.20. A positive weighted alpha hints at more gains. But further Fed rate hikes could go against the fund and its default risk is also higher. HYMB has a Zacks ETF Rank #4 (Sell) with a High risk outlook.

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