Skip to content
Subscriber Only

Biggest ETF’s Premium Grows as Fund Exodus Abates: Muni Credit

The biggest exchange-traded fund tracking the $3.7 trillion municipal-bond market sold this week at the highest premium to the value of its assets since May, an early sign that local debt may avoid a second year of losses.

After the worst year since 2008 for city and state debt, the shift to a premium for muni ETFs points to a potential return to earnings, said Mikhail Foux, a credit analyst at Citigroup Inc. in New York. Local securities may earn 4 percent to 6 percent in 2014, he said.