5 Top ETFs to watch
Will one muni bond's bleak trip turn around?
Worries over rising interest rates have whacked the largest muni bond fund in the world. The iShares National AMT-Free Municipal Bond ETF (MUB) has been bleeding assets and trading at a discount to its net asset value since May. Since then, it has been on a bleak trip down the abyss.
MUB saw its first sign of life last week. That's when it had its first inflows since May, with a respectable $50 million. And it didn't close at a discount on Oct. 24 — the first time in five months that the price wasn't below the net asset value. These signs could signal a turnaround in this ETF and in the municipal bond market in general.
A period of prolonged low rates, which seems more likely after the economic hit from the government's partial shutdown, would make MUB more attractive as an income play. It yields about 3 percent for a tax-equivalent yield of about 5 percent. This, and the beating MUB has taken, could give investors an opportunity to get back into the fund at a good price. Stay tuned.