ETFs of the Muni-bond Type

Did you know that municipal-bond exchange traded funds (ETFs) offer investors affordable access to a broad universe of the municipal bond market?

Muni bonds are a fairly opaque area of the market, and these new ETFs will provide transparency for investors. David Bogoslaw for Business Week reports that while the new ETFs represent a wide range of available muni bonds, it is not cost-effective for a fund manager to replicate an exact index. As more investors put their money into these funds, the managers will have increased flexibility to up the number of bonds as they adjust the holdings on a monthly basis. New ETFs available:

• SPDR Lehman Municipal Bond ETF (TFI)
• iShares S&P National Municipal Bond Fund (MUB)

Also, keep a look out for muni-bond funds from these providers: Van Eck proposes six muni-bond ETFs and four from PowerShares.