Municipal bond exchange traded funds (ETFs) have been whacked hard in a sell-off that sent them tumbling below their 200-day averages. Despite all that, some say now is the time to buy.
Investors are scared right now, and those who are the most frightened are selling their municipal bonds. If they’re feeling contrarian, they’ve been going for muni bonds. Gil Weinreich for Advisor One reports that many advisors aren’t bullish on muni bonds at the moment, but if they hold the “right” municipalities, they might do all right. [Muni ETF Shows Active Management’s Benefits.]
Jeff Cox for CNBC reports that munis shouldn’t be counted out. PIMCO’s Bill Gross recommends avoiding places with big budget shortfalls, such as Illinois, and looking at beaten down areas such as California or New York City. Places such as those have the most potential to treat investors well later as they recover. [Muni Bond ETFs: The Diversified Option.]
Right now, municipal bonds are all below their long-term trend lines, suggesting that a wait-and-see stance may be in order for now. If you want exposure to muni bond ETFs, consider setting up a trading alert to be notified when one of these or other funds offer up an opportunity:
- PIMCO Intermediate Muni Bond Strategy (NYSEArca: MUNI)
- Market Vectors High Yield Municipal Index (NYSEArca: HYD)
- SPDR Barclays Capital Municipal Bond (NYSEArca: TFI)
- Market Vectors Lehman Brothers AMT-Free Long Municipal (NYSEArca: MLN)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.