1-Star ETFs Poised to Plunge: SPDR Nuveen Barclays Capital Short-Term Municipal Bond?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the SPDR Nuveen Barclays Capital Short-Term Municipal Bond ETF (NYSE: SHM  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at this SPDR muni ETF and see what CAPS investors are saying about the ETF right now.

SPDR Nuveen Barclays ST Muni ETF facts

Inception October 2007
Total Net Assets $1.6 billion
Investment Approach Seeks to provide investment results that correspond generally to an index that tracks the short-term tax-exempt municipal bond market and provides income that is exempt from federal income taxes.
Expense Ratio 0.2%
Dividend Yield 1.3%
Year-to-Date / 1-Year / 3-Year Returns 1.4% / 1.9% / 2.6%
Alternatives iShares S&P National AMT-Free Municipal Bond Fund
PowerShares VRDO Tax-Free Weekly
Market Vectors Short Municipal Index ETF

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 14 All-Star members who have rated the ETF believe it will underperform the S&P 500 going forward.

Earlier this month, one of those Fools, TerryHogan, succinctly summed up the bear case for our community:

Short term municipal bonds? Are you kidding me? While I don't see any kind of Meredith Whitney apocalypse in the near future, there are enough large defaults to be somewhat worried. The main reason I'd red thumb it that the only real appreciation is coming through yield, and it's lower than S&P. Easy call.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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