The largest ETFs in the muni bond category include iShares S&P National AMT-Free Municipal Bond Fund (NYSEArca: MUB), SPDR Nuveen Barclays Capital Short Term Municipal Bond ETF (NYSEArca: SHM) and PowerShares Insured National Municipal Bond Portfolio (NYSEArca: PZA).
MUB has posted a total return of 3.5% year to date. The ETF has a 12-month yield of 3.1%, according to manager BlackRock.
On a risk-adjusted basis, muni bonds are performing better in 2012 than corporate bonds, Treasuries, commodities and U.S. stocks, Bloomberg reported.
“If you look at tax-equivalent yields, they look attractive versus other fixed-income markets,” said Daniel Solender, portfolio manager at Lord Abbett & Co., in the article. “The returns look good too. People see the returns and want to participate.”
iShares S&P National AMT-Free Municipal Bond Fund
