As I expected the Tax exemption for muni interest remains safe for 2013. Now with the higher tax rates MAV is a great buy even in the high 15's. In my experience and as one of my advisors in a recent article stated it sometimes does no good to look at lengthy analysis of fundamental issues when at the end of the day it is about whats going on in the market and what the market is saying. The market has been saying high yield muni ETFs like MAV still has legs in this perfect storm for Munis.
I have both MAV and MHI since 2011 when their prices were around $13. Since then I added to my positions when the prices dropped sharply. The tax fee dividend was a good portion of my income and the principal has gown over 10%. But now, I am getting concerned about upcoming rising rates.
I don't think rising interest rates should be of too much concern anytime soon with the Fed making it clear they will continue to do what they can to keep rates down. To protect against rising rates I have hedged by buying a little of an ETF which shorts treasuries and goes up when rates go up. The danger to the price of MAV and other Muni ETF's is the talk of reducing the tax exemption fo Mun's. The odds of this are about 30% according to most analysts of some reduction being passed in the future. I'm willing to bet against any major reduction being passed for now.