Muni Bond ETFs: The ‘Category F5 Tornado Has Passed

Traders are telling me, in so many words, that they are beginning to touch solid ground (perhaps with only their toes) and set bids in today’s market in the wake of the selling frenzy which occurred yesterday.

The recalibration of the AAA yield curve for municipals reveals a nearly 100 basis point adjustment to 30 year yields from the end of April.

Ratios of municipal bond yields to Treasury yields are in most cases above 100% as illustrated in the table below.

I believe there is potential value in this market that I have not seen in over two years. [Muni Bond ETF Discounts May Signal Buying Opportunity]

James Colby is a portfolio manager and senior municipal strategist at Market Vectors ETFs.