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Biggest ETF at Record Discount Signals July Rally: Muni Credit

The biggest exchange-traded fund tracking the $3.7 trillion U.S. municipal market is selling at its deepest discount ever to the value of its assets. That may be a sign that tax-exempt securities are getting cheap enough to rekindle buying.

The $3.5 billion iShares S&P National AMT-Free Municipal Bond Fund, known as MUB, touched $100.42 in New York trading today, the lowest since April 2011, data compiled by Bloomberg show. The move reflects yields on benchmark 10-year local debt climbing as high as 2.68 percent , the most since October 2011.