At a glance
SMI charges 0.24% a year, above the 0.2% average of the 7 funds most like it (the 7th cheapest of 8). It has $11.3M in assets, the 8th largest of that group. Over the past year it returned +0.0% with distributions reinvested, 2nd of those 8 funds; over three years it returned +2.4% a year. At its worst it fell 12.0% in the 2022 bear market (S&P 500: 24.5%), and is still below its earlier high. Its ten largest positions make up 40.2% of the fund, out of 35 in all.
The short version
VanEck HIP Sustainable Muni ETF (SMI) is an actively managed fund holding investment-grade (higher-rated) bonds issued by US states, cities and agencies, seeking income generally free of federal income tax. Its distinguishing feature is a screen using HIP Investor ratings tied to three UN sustainable development goals. It is tiny, with $11.3 million in assets as of April 30, 2025, and its 0.24% annual fee is above the 0.20% average of similar muni funds.
Price history
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SMI 0.0% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| SMI price data to Oct 27, 2026 | 0.0% | 0.0% | +2.4% | -0.8% | — | -0.9% |
- Over the year to Oct 27, 2026, SMI returned 0.0%, 2nd of 8 among similar funds.
- Its 5-year annualized return was -0.8%.
- Its worst full calendar year was 2022 (-8.6%); its best was 2023 (+5.0%).
- The deepest fall in its price history was 12.8% (Dec 16, 2021 to Oct 31, 2022), not yet recovered.
Show as a table
| Year | Price data |
|---|---|
| 2025 | -2.2% |
| 2024 | +1.6% |
| 2023 | +5.0% |
| 2022 | -8.6% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 10.9% over that stretch · deepest drop along the way 12%, not recovered by the end of the data |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2025 | $0.6400 | -46.7% |
| 2024 | $1.2000 | +22.4% |
| 2023 | $0.9800 | +81.5% |
| 2022 | $0.5400 |
What's inside
As of Apr 30, 2025, the fund held 35 securities; the ten largest made up 40.18% of assets.
| Holding | Weight | |
|---|---|---|
| New York State Dormitory Authority Bonds and notes | 5.28% | |
| Wylie Independent School District/Collin County Bonds and notes | 4.79% | |
| City & County Honolulu HI Wastewater System Revenue Bonds and notes | 4.54% | |
| Port Authority of New York & New Jersey Bonds and notes | 4.45% | |
| City of Los Angeles Department of Airports Bonds and notes | 4.22% | |
| Dallas Independent School District Bonds and notes | 3.97% | |
| New York City Municipal Water Finance Authority Bonds and notes | 3.56% | |
| San Francisco City & County Airport Comm-San Francisco International Airport Bonds and notes | 3.39% | |
| Pennsylvania Turnpike Commission Bonds and notes | 3.00% | |
| Arizona Industrial Development Authority Bonds and notes | 2.97% | |
| University of North Carolina at Chapel Hill Bonds and notes | 2.50% | |
| California Health Facilities Financing Authority Bonds and notes | 2.50% | |
| New York State Dormitory Authority Bonds and notes | 2.46% | |
| Wisconsin Department of Transportation Bonds and notes | 2.45% | |
| Empire State Development Corp Bonds and notes | 2.31% |
By country
United States 95.57%By issuer
Municipalities 95.57%The bonds mature in 15.3 years on average (weighted by size), with an average coupon of 4.57%.
Source: N-PORT holdings report as of Apr 30, 2025. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Apr 30, 2025, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.92%, -1.85%, -0.67%.
How it works
SMI is actively managed, not tied to an index. VanEck uses a rules-based process built on HIP (Human Impact + Profit) Ratings licensed from HIP Investor, Inc. The ratings judge how well a bond serves three UN Sustainable Development Goals — resilient infrastructure, sustainable cities, and sustainable consumption and production — plus environmental, social and governance (ESG) factors and climate resilience. HIP rates only issuers whose region includes a qualified opportunity zone, an economically distressed community where new investment may earn tax breaks.
Normally at least 80% of assets sit in bonds whose income is exempt from federal income tax, though it may still be subject to the alternative minimum tax (AMT), a separate tax some higher earners owe. A second policy keeps at least 80% in bonds VanEck judges to support sustainable development; that one can change on 60 days' notice. The fund aims to hold only investment-grade (higher-rated) bonds, has no target maturity and may lean heavily on California and New York issuers.
As of April 30, 2025, it held 35 bonds, with the 10 largest making up 40% of assets. The biggest were New York State Dormitory Authority (5.3%), Wylie Independent School District in Texas (4.8%) and Honolulu's wastewater system (4.5%). Average maturity was 15.3 years, so the fund's price falls noticeably when interest rates rise.
What it really costs
- SMI charges 0.24% a year, versus an average of 0.2% for the similar funds below (7th of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $25 in the first year and $306 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| SMI | $25 | $77 | $135 | $306 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
Its stated objective is income generally free of federal income tax from investment-grade municipal bonds, though its payout record and tiny size call for caution.
SMI could add federally tax-exempt income from investment-grade municipal bonds, which matters most in taxable accounts, not IRAs. But price records show no distributions in the year to October 27, 2026, a gap worth confirming with VanEck before relying on the fund for income. Costs run 0.24% a year — $306 over 10 years on $10,000 in the SEC's standard example — versus 0.03% for Vanguard Tax-Exempt Bond ETF (VTEB).
SMI launched in September 2021, so it has no record from 2008 or 2020. In the 2022 stock bear market it lost 10.9%, and 2022 was its worst calendar year, a loss of 8.6%. Its deepest drop, 12.8% from December 2021 to October 2022, had not been recovered by October 27, 2026; a retiree cashing in during that slide would have locked in the loss. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Taxable-account investors seeking muni income generally free of federal income tax who want bonds screened with HIP Investor's ratings tied to UN sustainability goals.
- Investors comfortable with longer maturities, averaging 15.3 years as of April 30, 2025, and the larger price swings that come when interest rates move.
- Those wanting a short list of 35 bonds (as of April 30, 2025) from issuers such as Texas school districts, airports and water systems.
Look elsewhere if
- Cost-focused investors: SMI's 0.24% fee is the second-highest in its group of eight similar muni funds, while VTEB charges 0.03% and MUB 0.05%.
- Investors holding bonds inside an IRA or 401(k), where the federal tax exemption adds little and taxable bond funds may pay more.
- Those needing steady payouts or easy trading: assets were just $11.3 million (April 30, 2025), with no distributions in the year to October 27, 2026.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| SMI this fund | 15.3 yrs | 0.24% | $11.3M | 0.0% | +2.4% |
| TFI SPDR Nuveen Bloomberg Municipal Bond ETF | 15.1 yrs | 0.23% | $3.12B | -0.8% | +3.9% |
| FMB First Trust Managed Municipal ETF | 15.5 yrs | 0.65% | $2.05B | 0.0% | +4.3% |
| VTEB Vanguard Tax-Exempt Bond ETF | 14.5 yrs | 0.03% | $48.52B | +0.1% | +4.4% |
| MUB iShares National Muni Bond ETF | 13.5 yrs | 0.05% | $45.38B | -0.2% | +3.7% |
| JMUB JPMorgan Municipal ETF | 16.7 yrs | 0.18% | $8.75B | -0.2% | +4.4% |
| CMF iShares California Muni Bond ETF | 12.4 yrs | 0.08% | $4.63B | -0.6% | +3.8% |
| ITM VanEck Intermediate Muni ETF | 12.4 yrs | 0.18% | $2.12B | -0.3% | +4.6% |
Questions investors ask
Is SMI income tax-free?
Mostly, at the federal level. SMI seeks current income generally exempt from federal income tax and normally keeps at least 80% of assets in bonds paying such income. Some of that income can still count toward the alternative minimum tax (AMT), a separate tax some higher earners owe. Gains from cashing in shares at a profit are not covered by the exemption. Munis are often exempt from state tax only for residents of the issuing state, and this fund may hold many California and New York bonds.
Does SMI pay monthly dividends?
Its records show no payouts at all in the 12 months to October 27, 2026, so its trailing yield (income paid over the past year as a share of price) was 0%. That stands out for a fund whose stated objective is current income and whose bonds carried an average coupon, or interest rate, of 4.57% as of April 30, 2025. Anyone counting on SMI for regular income may want to confirm its payout schedule and status with VanEck.
What's the difference between SMI and TFI?
Mainly the selection method and size. SMI's managers pick investment-grade munis using HIP Investor's sustainability ratings. SPDR Nuveen Bloomberg Municipal Bond ETF (TFI) is SMI's closest match on average maturity (15.1 years versus 15.3) and issuer mix, though that match ignores the sustainability screen. Fees are nearly identical: 0.23% for TFI versus 0.24% for SMI. TFI held $3.1 billion as of June 30, 2026, against SMI's $11.3 million as of April 30, 2025. Over three years to October 27, 2026, TFI returned 3.9% a year and SMI 2.4%.
Is SMI good for retirement income?
It has clear drawbacks for that job. Its goal is income generally free of federal income tax, which helps most in taxable accounts, yet price records show no distributions in the year to October 27, 2026. Over the five years to that date it lost 0.8% a year, and its 12.8% drop from December 2021 to October 2022 had not been recovered. Its 0.24% annual fee is above the 0.20% average for similar funds; Vanguard Tax-Exempt Bond ETF (VTEB) charges 0.03%.
What does HIP stand for in VanEck HIP Sustainable Muni ETF?
HIP stands for Human Impact + Profit, a rating system from HIP Investor, Inc. that VanEck licenses. The ratings score municipal bonds on how well they support UN goals for resilient infrastructure, sustainable cities, and sustainable consumption and production, plus environmental, social and governance (ESG) and climate-resilience measures. Only issuers whose region includes a qualified opportunity zone, an economically distressed area where new investment may earn tax breaks, get rated. HIP supplies data; it does not manage the fund.