Some industry experts say fears of municipalities defaulting are overblown, while some bankruptcy filings are dismissed, SmartMoney noted.

The iShares S&P National AMT-Free Municipal Bond Fund has a 12-month yield of 3.46%, according to manager BlackRock.

The muni bond ETF is up 8.6% year to date, according to Morningstar.

iShares S&P National AMT-Free Muni Bond

For more information on the muni bond market, visit our municipal bonds category.

Max Chen contributed to this article.