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VanEck to transition underlying indexes for several of its municipal bond ETFs


VanEck has announced plans to change the underlying indexes tracked by a number of the firm’s municipal bond ETFs, switching to new indexes from ICE Data Indices (“ICE”). The Funds include VanEck Short Muni ETF (ticker: SMB), VanEck Intermediate Muni ETF (ticker: ITM), VanEck Long Muni ETF (ticker: MLN), VanEck Short High Yield Muni ETF (ticker: SHYD) and VanEck High Yield Muni ETF (ticker: HYD).

Each Fund will seek to track a transition index, calculated by ICE, starting on or around March 1, 2022 until November 30, 2022 at which point they will transition to the final indexes. 

The firm writes that the transition to the final indexes is expected to broaden the investment universe of each of the Funds. Following the completion of the transition phase, the Funds names and tickers will remain unchanged, and the ETFs will continue to be listed on Cboe BZX Exchange.

“We have been very impressed with ICE’s data, analytics and calculation services over the years and are very pleased to be partnering with them as we look towards significant future growth of our municipal bond ETF family,” says Michael Cohick, Director of Product with VanEck. “Given the unique nature of the municipal bond market, we are taking a transitioned approach to the index changes. This is intended to enable the portfolio managers to make the necessary adjustments to portfolio holdings in a manner that minimizes the potential impact of the turnover to shareholders. We are also happy that the change will align the pricing source used to calculate the Funds’ net asset values and the source used to calculate their index returns, essentially providing a better and more transparent experience when investors compare the ETFs’ performance against the indexes they seek to track,” Cohick says.

“We’re excited to expand our relationship with VanEck as they transition this family of municipal bond ETFs to a robust set of broader indexes that align their preferred fund NAV pricing source with the source used to calculate the indexes.” says Mark Heckert, Chief Product Officer, Fixed Income and Data Services at ICE.

“Investor interest in municipal bond exposures is reaching levels we have not seen for several decades, as investors pay ever closer attention to the income-generating portion of their portfolios. To help investors meet their needs and goals, we are constantly evaluating our lineup to help ensure that we are providing the best possible approaches in the most efficient formats, and we are very excited to be making these index changes and the enhancements they will bring,” says Jim Colby, Portfolio Manager with VanEck.


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