December 2, 2016 Comments (0) Blog

VanEck Vectors CEF Municipal Income ETF Investment Losses

(Last Updated On: December 7, 2016)

Are you concerned about your losses investing in VanEck Vectors CEF Municipal Income ETF? If so, The White Law Group may be able to help.

The recent rise in interest rates is having an effect on the bond market. The 10-year U.S. Treasury yield jumped 53 basis points, ending the month at 2.37%. This sent bond prices diving.

In addition, a huge supply of new muni bonds were issued in October, as state and local governments rushed to fund projects ahead of what they expected to be a volatile market after the election.

Funds that invest in long-term bonds with the shakiest credit have been hit hardest. One example, long-term California municipal bonds, are down 6.6%, including reinvested interest, since the July low in interest rates. High-yield munis are down 6.1% the same period.

VanEck Vectors CEF Municipal Income ETF (XMPT) is currently down 12.63%. The $87.2 million ETF invests in closed-end muni funds and has a 1.52% expense ratio.

According to the VanEck website, the VanEck CEF Municipal Income ETF (XMPT®) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of S-Network Municipal Bond Closed-End Fund Index (CEFMXTR), which is intended to track the overall performance of the U.S.-listed closed-end funds that invest in U.S. dollar denominated tax-exempt market.

Performance History: Average Annual Total Returns* (%)

 

1 MO* 3 MO* YTD* 1 YR 3 YR 5 YR 10 YR LIFE
07/12/11
XMPT (NAV) -4.91 -11.03 0.05 2.32 9.22 5.02 5.98
XMPT (Share Price) -4.44 -11.31 -0.32 2.40 9.24 5.06 6.00
CEFMXTR (Index) -4.88 -10.96 -0.05 2.71 9.66 5.43 6.40
Performance Differential (NAV – Index) -0.03 -0.07 0.10 -0.39 -0.44 -0.41 -0.42
After Tax Held -5.09 -11.51 -1.88 0.16 6.70 2.67 3.66
After Tax Sold -2.77 -6.22 0.12 1.40 5.96 2.83 3.60

*Returns less than one year are not annualized.

For more information on The White Law Group’s investigation of municipal bonds, see Muni Bonds Sinking as Rates are Rising.

Municipal bonds used to be one of the safest investments that a financial advisor could recommend to a client, and were often utilized by retired investors looking for a safe way to generate income in retirement.  Unfortunately, the heyday of muni bonds appears over and any financial advisor not adequately disclosing the risks of municipal bonds is doing so negligently.  There is simply too much information out there in the media and too many negative warning signs for a financial advisor to continue to tout these investments as super low risk.

The foregoing information has been provided by The White Law Group.  The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group visit http://www.whitesecuritieslaw.com.  For a free consultation with a securities attorney, please call the firm’s Chicago office at 888-637-5510.