The iShares S&P National Municipal Bond Fund (NYSEArca: MUB) was fractionally lower Tuesday. The ETF has a 30-day SEC yield of 1.77%, according to manager BlackRock. [Tax Break Makes Muni Bond ETF Yields More Attractive]
Aside from more potential bankruptcies, rising interest rates are a risk for muni bond ETF investors. Funds holding muni bonds with longer durations are more sensitive to rising interest rates.
Berkshire also reduced its exposure to CDS backed by high-yield corporate debt in the first half of the year, to $3.26 billion, from $4.57 billion at the end of 2011, Reuters reported.
High-yield corporate bond ETFs have been popular in 2012 with investors trying to increase income. SPDR Barclays High Yield Bond (NYSEArca: JNK) and iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) have each netted inflows of more than $300 million the past month. [Investors Chase Yield, Risk in Junk Bond ETFs]
Full disclosure: Tom Lydon’s clients own JNK and HYG.