Puny Muni Costs
Two municipal bond exchange-traded funds (ETFs) were launched in September and 10 more are on the way. Each muni ETF will track a municipal bond index and pay tax-exempt income to investors.
These ETFs address the most notorious shortcomings of muni bonds: pricing. In the muni market, there can be a huge gap between the prices that dealers pay sellers and charge buyers. The spread for ETFs usually is around $1 to $1.50 per $1,000.
The first two muni ETFs, Lehman Municipal Bond and iShares National Municipal Bond, have yields in the 4%-4.6% range and annual expense ratios of 0.20% and 0.25% respectively.
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These ETFs address the most notorious shortcomings of muni bonds: pricing. In the muni market, there can be a huge gap between the prices that dealers pay sellers and charge buyers. The spread for ETFs usually is around $1 to $1.50 per $1,000.
The first two muni ETFs, Lehman Municipal Bond and iShares National Municipal Bond, have yields in the 4%-4.6% range and annual expense ratios of 0.20% and 0.25% respectively.
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posted by Bob Moser at
7:51 PM
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