State Street Global Advisors has announced the launch of the SPDR Nuveen Municipal Bond ESG ETF (MBNE).
Sub-advised by Nuveen, a recognised leader in the municipal bond market, MBNE is actively managed and is designed to invest in municipal securities from issuers that are leaders in their sector in delivering ESG outcomes or whose proceeds are used towards positive environmental or social projects.
“The prospect of higher taxes coupled with rising uncertainty surrounding future interest rate hikes have increased demand for actively managed municipal bond ETFs,” says Brie Williams, head of practice management at State Street Global Advisors. “At the same time demand for municipal bond exposure is growing, investors are increasingly looking beyond equities for ESG exposure, which is why we’re excited about the expansion of our SPDR ETF municipal bond lineup and the partnership we’ve built with Nuveen to launch MBNE.”
The firm writes that with over seven decades of collective experience investing in municipal bonds, Tim Ryan, Shawn O’Leary and David Blair will leverage Nuveen’s proprietary ESG Municipal Bond Scoring Tool to select bonds from issuers that are leaders in environmental stewardship, strong governance and positive social outcomes. The strategy will primarily consist of investment-grade, tax-exempt municipal securities ranging from two to 17 years in maturity issued by US municipalities. To identify potential municipal bonds for investment, Nuveen utilizes a value-oriented strategy which is designed to identify higher-yielding and undervalued municipal bonds that offer above-average total return potential.
“As investors become more familiar with ESG-integrated strategies, Nuveen has created a proprietary framework that is designed to identify the municipal bond issuers that support income generation for investors and achieve positive ESG outcomes in their communities,” says Tim Ryan, municipal portfolio manager at Nuveen. “The fund is also designed to provide exposure to bonds whose proceeds are used towards positive environmental or social projects addressing critical issues including climate change, environmental degradation, inequality, poverty, and justice and are aligned with the UN Sustainable Development Goals.”