FTMH vs HYD

FTMHBFranklin Municipal High Yield ETF

HYDAVanEck High Yield Muni ETF

In short

FTMH Most muni ETFs are cheap index trackers. FTMH works the other side of the street: an active hunt for tax-exempt income in the muni market's lower-rated corners, off a strategy whose track record starts in 1985.

HYD Junk munis with a seatbelt: HYD's index mixes lower-rated and unrated bonds with a slice of investment-grade credit, spread across roughly 1,900 tax-exempt issues. Trading since 2009, priced under the category median.

Stated mandate

FTMH The fund seeks high current income exempt from federal income tax.

HYD The fund seeks to track the performance of a broad index of U.S. dollar-denominated, high-yield, long-term tax-exempt municipal bonds.

Why people hold it

• FTMH One job, stated plainly in its own filings: high current income exempt from federal income tax. That is a different mandate than a broad investment-grade muni index fund.
• The strategy's record runs back to 1985, through multiple muni credit cycles, long before the ETF wrapper showed up.
• Roughly 500 bond positions, so one troubled issuer is a dent rather than a crater.
• In a crowded muni field, it lands in the upper half of the funds we review, which is respectable company for a credit-picking strategy.

• HYD The "crossover" build is the whole idea: lower-rated and unrated munis blended with an investment-grade allocation meant to firm up credit quality and tradability.vaneck.comvaneck.com 2
• Costs 0.32% a year, below the high-yield muni median of 0.40% and under index rival HYMB at 0.35%.
• Roughly 1,900 bonds, paid out monthly, so no single troubled issuer drives the whole distribution.
• Open since 2009 and one of the stronger index implementations in the high-yield muni group.vaneck.com

Worth knowing

• FTMH 0.35% a year, above the muni-fund median of 0.30% and well above index staples like VTEB (0.03%) and MUB (0.05%). Active credit research is the thing you are paying for.
• High yield muni means lower-rated issuers. Credit risk and price swings run hotter here than in investment-grade muni index funds.
• Volume is moderate rather than firehose-level, and the underlying bonds trade thinly, so bid-ask spreads can be wider than the big index munis.

• HYD High yield means what it says: lower-rated and unrated municipal credit, where defaults and price swings bite harder than in investment-grade munis.vaneck.com
• A long-term muni portfolio, so interest-rate moves move the price. The tax-exempt income counts for most in a taxable account.vaneck.com
• Munis trade over the counter, not on an exchange, so spreads on the fund can widen when the bond market gets jumpy.vaneck.com

Full FTMH profile⁠

Full HYD profile⁠