The largest exchange traded fund (ETF) for U.S. municipal bonds has traded sideways lately even though nervous mutual-fund investors have yanked money from the category for 21 weeks running.

The $2 billion iShares S&P National AMT-Free Municipal Bond Fund (NYSEArca: MUB) has traded in a tight range around $100 a share for nearly two months. The ETF bounced back in January following a steep decline in late 2010 when default fears swirled and investors worried about state budget shortfalls.

Additionally, high-profile analyst Meredith Whitney shook up the muni market when she predicted trouble for bond investors. [Muni Bond ETFs Trading In Choppy Water.]

Investors pulled $465 million from muni-bond funds in the latest week. The category saw net redemptions for a 21st straight week.

iShares S&P National AMT-Free Municipal Bond Fund

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