By Hilary Russ
NEW YORK May 31 The asset and wealth management
division of Deutsche Bank will launch next week a
first-of-its kind exchange-traded fund devoted purely to
infrastructure-related municipal bonds.
The fund, called db X-trackers Municipal Infrastructure
Revenue Bond Fund, will carry the ticker "RVNU" on the NYSE and
is the first muni ETF to hold exclusively infrastructure bonds.
By pulling the ETF away from potentially riskier kinds of
muni bonds, "it makes it a bit more of a defensive play," said
Jeff Tjornehoj, a senior research analyst at Lipper, a unit of
"A lot of the offerings in this space are quite small, so it
remains to be seen how well this idea will be received," he
Lipper lists 29 municipal bond ETFs, none of which are
entirely focused on infrastructure.
Overall, there is less than $12.5 billion in muni ETFs. The
largest such fund is iShares S&P National AMT-Free MUB ETF at
about $3.6 billion.
A spokesman for Deutsche Asset and Wealth Management said
that managers could not discuss details of the fund until after
it launches on Tuesday.
Underlying the fund is the DBIQ Municipal Infrastructure
Revenue Index, designed to track federal, state and local
infrastructure projects, including water and sewer systems,
public power systems and toll roads and bridges, according to a
U.S. Securities and Exchange Commission filing in February.
Many such projects are considered essential services that
people cannot do without, and they usually generate their own
revenue. The bonds used to finance the projects are sometimes
considered safer than other forms of municipal debt for those
Many muni ETFs already contain infrastructure bonds, so
Deutsche Bank could be trying to tap into an emotional yearning
among investors to help rebuild aging U.S. infrastructure, said
Timothy Strauts, a senior fund analyst at Morningstar.
"People will maybe be more likely to buy it because they
feel like they're helping the country out," he said.
"If they just launched a regular national muni fund, it's
unlikely that it would take off. There's already established
players out there doing it," he said. "It's unlikely that
Deutsche Bank is going to try to compete on cost, and they
definitely can't compete on size."