Municipal Bond ETFs

When it rains it pours. There are currently a total of 18 new Municipal Bond ETFs coming from 4 different issuers. Barclays, SSGA, Van Eck and PowerShares are each coming with both a California and a New York ETF.

These make sense in that both  states have large populations and high individual tax rates.  All four issuers are taking aim at the multitude of Nuveen Bond Funds.  The concept makes sense in that individuals investing in Municipal Bonds often pay a premium for small denominations and sell at a discount if they hold small pieces.

The question is whether the market(read Specialists) can absorb and resell this many ETFs in a reasonable time frame.

First to market may have the advantage. As an ex-Municipal Bond trader(in another life) I will be interested in seeing how this plays out.

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1 Response to “Municipal Bond ETFs”


  1. 1 Robert Ludke September 4, 2007 at 7:28 pm

    Steve – is there any connection between the apparent glut of new ETFs on the market and the issue about wide trading spreads facing some lesser known ETFs that was raised in today’s WSJ?


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