The largest exchange traded fund tracking municipal bonds is down nearly 3% the past two days after analysts pointed out the ETF was trading at a significant premium to its net asset value.

The $2.8 billion iShares S&P National AMT-Free Municipal Bond Fund (NYSEArca: MUB) has been under pressure this week.

On Wednesday, Morningstar analyst Timothy Strauts noted the muni bond ETF has been trading “at a substantial premium to its net asset value lately, a phenomenon more frequent in closed-end funds than in the ETF marketplace.” He said investors should sell the ETF, which has outperformed the similar SPDR Nuveen Barclays Capital Municipal Bond (NYSEArca: TFI) this year due to the premium. [Muni Bond ETFs Face Tax Uncertainty]

Strauts said MUB has been trading at a 3% to 4% premium. [Muni Bond ETFs March Higher]

The fund “appears extremely overvalued versus its net asset value,” Matt Fabian of Municipal Market Advisors wrote in a Feb. 21 report, Bloomberg reports.

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