The Selected Rec and Portfolio of Member: coocao13


Moneyrec ID: coocao13
Member Since: 2/2/2010
Reviews Written:0
The Rec: Read and Respond
RecDays left in Rec
coocao13IShares launched new series of municipal bond ETFs: The iShares S&P AMT-Free Municipal Series. However, how someone can analyze their safety and performance? These are brand new funds. For a regular investor they are a tough nut to crack. Has anyone has any clue if they worth to consider or not? Are there any safe tax-exempt alternatives to consider? Thanks.
2/2/2010 12:40:06 PM
10987654321
          
Tcon14: Hi Coocao, How I see it: An ETF is a very cost effective way to way to invest in munis and MUB-iShares S&P National AMT-free Muni Fund has that edge over traditional Muni mutual funds. Also, this fund avoids bonds that will trigger the Alternative Minimum Tax and only holds bonds that pay federal income tax-exempt interest. The risk, I feel, is that this fund holds bonds in States and Municipalities that have been the heaviest hit as these areas of the Country are the largest issuers of bonds; hence, over-represented in most muni bond indexes. So, risks are higher, but yields are higher too. Some experts feel it would be prudent to wait for the credit crisis to soften before entering into the muni bond market. ETF's are lower cost and more liquid than individual bonds.
2/2/2010 2:37:35 PM
 
Kenster1:Your question has me thinking about this too. I've been looking at ETFs and making a portfolio change. Munis are on the radar screen. I've been advised that this is both a good time and a bad time to buy munis. Good for yield, bad for default risk and the prospects of higher interest rates. I'm going to look into them and this ETF as well. Thanks for the heads up! Kenster1
2/2/2010 2:57:43 PM
 
mywings777:I've stayed away from etf's, but now I am interested. I like the fact that they are liquid and the expenses are so low. Especially with bonds, the expense ratio is key. I plan on moving into more fixed-income in the next year, or so and will consider etf's.
2/3/2010 12:41:50 PM
 

Log in to Respond to This Rec


.