Interest earned on muni bonds is often exempt from federal taxation. Although many of these bonds are deemed "investment grade" by rating agencies, signifying a low degree of credit risk, they are not without danger. Investing in a municipal bond exchange-traded fund (ETF) can be a safe way to diversify your money because it holds bonds from many different municipalities and state and local governments.

Funds Administered (AUM)

Last year, municipal bonds fared better than the market average.

Among municipal bond ETFs, PVI, IBMK, and BSMM have generated the highest total returns over the past year.

Municipal bonds issued by the Geneva (New York) Industrial Development Agency, Montgomery County (Maryland), and Cook County (Illinois) make up the bulk of the holdings in these ETFs.

Cash Received From Lending Securities

If you look at the returns over the past year, the Invesco VRDO Tax-Free ETF is the winner among municipal bond ETFs (PVI). Here we look at the top three exchange-traded funds (ETFs) for municipal bonds. All of the figures below are up to date as of September.

Each ETF's top holdings exclude cash and holdings obtained with securities lending proceeds except in extraordinary circumstances, such as when the cash part is unusually substantial, to focus on the fund's investment strategy. The case of IBM down below.

Invesco VRDO Tax-Free Exchange Traded Fund (PVI)

Yearly Return of 0.2%

Rate of Expenditure: 0.25%

Three-month ADV: 6,995; Yield on Investment: N/A

Current Assets: $63.5 Million

Launched on the 15th of November, 2007

The Invesco Group, Inc., as the Issuer.

Subdivisions Of Government

Pursuing emulation of the ICE US Municipal AMT-Free VRDO Constrained Index is a primary goal of PVI. This index tracks the price movement of publicly issued variable rate demand obligations (VRDOs) from states, territories, and political subdivisions denominated in U.S. dollars and exempt from federal income tax. The interest rates on these loans are adjusted daily, weekly, or monthly.

Budgetary Controls

To track the performance of the Index, the ETF does not invest in every security included in the Index but rather takes a more statistical approach. Due to its concentration on the yield curve's short end, PVI is very interest-rate risk-averse. However, although this reduces risk, it also reduces potential returns. Bonds issued by the Geneva, New York Industrial Development Agency, the Emmaus, Pennsylvania General Authority, and the Illinois Finance Authority are the fund's top three holdings.

Money Market Bond Exchange Traded Fund (ETF)

Annualized Return of -0.1%

Budgetary Outlay Percentage: 0.18%

Dividend Yield per Year: 1.33 Percent

The Three-Month Daily Average Volume of Assets Is 66,532. Currently, we have $434.5 million in assets under management.

Initial Launch Date: September 1, 2015

BlackRock Financial Management, the issuer.

Investing in IBMK is like following an index. The S&P AMT-Free Municipal Series Dec 2022 Index comprises high-quality U.S. municipal bonds with maturities between December 31, 2021, and December 2, 2022. The ETF seeks to provide taxable income while mitigating interest rate risk. Approximately 47.5% of the portfolio is held in cash and derivatives, followed by refund/escrow and municipal tax-backed bonds.

The Invesco BulletShares 2022 Municipal Bond Exchange-Traded Fund (BSMM)

Annualized Return of -0.2%

Budgetary Outlay Percentage: 0.18%

Dividend Yield Per Annum: 0.38%

Annualized Rate of Change Average Daily Asset Volume in the Last 24 Hours: 24,082 Eighty-nine million dollars are being overseen by our team.

Beginning on September 25, 2019

The Invesco Group, Inc., as the Issuer.

BSMM follows Invesco BulletShares US Municipal Bond 2022 Index. This index aims to track municipal bonds denominated in U.S. dollars that will mature in 2022. US states, state agencies, or municipal governments are the issuers of these bonds. Due to the fund's concentration on bonds maturing in 2022, BSMM will close on or around December 15 of that year.

Reliability Or Exhaustiveness

Nothing herein should be construed as personal investment advice or a suggestion to buy or sell any security or engage in any particular investment strategy. Our best judgment has led us to assume the data shown here is accurate and thorough, but we make no guarantees about that. Not all readers will agree with our opinions or find our techniques advantageous.

All views, opinions, and analyses expressed in our content are made as of the publishing date. They are subject to change without notice due to the dynamic nature of the market and economic situations.