iShares National Muni Bond ETF (ARCA: MUB)

iShares National Muni Bond ETF (ARCA:MUB), Quote.Headers.trade-ideas

iShares National Muni Bond ETF

The Fund seeks to track the investment results of the ICE AMT-Free US National Municipal Index (the Underlying Index), which measures the performance of U.S. dollar denominated investment grade tax-exempt debt publicly issued in the U.S. domestic market by U.S. states and their political subdivisions. As of February 28, 2023, there were 22,659 issues in the Underlying Index. As of February 28, 2023, a significant portion of the Underlying Index is represented by municipal bonds. The components of the Underlying Index are likely to change over time.

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On CNBC’s &#34;Halftime Report Final Trades,&#34;  Bill Baruch  of Blue Line Futures named  Synopsys, Inc.

Lennar, Synopsys And More On CNBC&#39;s &#39;Final Trades&#39;

On CNBC&#39;s &#34;Fast Money Halftime Report,&#34; Liz Young recommended iShares National Muni Bond ETF (NYSE: MUB) as a buy.

&#39;Fast Money Halftime Report&#39; Picks For October 15

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The latest round of 13F filings from institutional investors is out, revealing to the world the stocks that some of the richest and most successful investors have been buying and selling.

Q1 13F Roundup: How Buffett, Einhorn, Ackman And Others Adjusted Their Portfolios

On CNBC&rsquo;s &quot;<a href="https://www.cnbc.com/video/2023/11/17/final-trades-lennar-synopsys-more.html">Halftime Report Final Trades</a>,&quot; Bill Baruch of Blue Line Futures named Synopsys, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/snps#NASDAQ">SNPS</a>) <a href="https://www.benzinga.com/markets/equities/23/08/34025272/synopsys-enters-300m-accelerated-share-buyback-deal">as his final trade.</a>
Synopsys is expected to report results for the fourth quarter on Nov. 29, 2023, after the closing bell.
Shannon Saccocia of Boston Private picked Boston Private (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mub#NYSE">MUB</a>).
Don&rsquo;t forget to check out our <a href="https://www.benzinga.com/premarket/"> premarket coverage here </a> 
Joshua Brown of Ritholtz Wealth Management named Lennar Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/len#NYSE">LEN</a>) as his final trade.
Lennar recently reported better-than-expected results for its third quarter. The company posted quarterly earnings of $3.91 per share, which beat the analyst consensus estimate of $3.51. Quarterly sales of $8.73 billion beat the analyst consensus estimate of $8.45 billion, but were down 2.28% <a href="https://www.benzinga.com/news/earnings/23/09/34679685/how-to-earn-500-a-month-from-lennar-after-q3-results">from the same period last year</a>.
Price Action: Synopsys shares rose 0.3% to close at $534.78, while Lennar shares rose 0.3% to settle at $127.49 on Friday. iShares National Muni Bond ETF rose 0.1% during Friday&rsquo;s session. 
Check This Out: <a href="https://www.benzinga.com/trading-ideas/long-ideas/23/11/35843561/jim-cramer-has-a-problem-with-this-fintech-giant-i-like-the-mastercards-and-the-visas-no"> Jim Cramer Has A &#39;Problem&#39; With This Fintech Giant: &#39;I Like The Mastercards And The Visas Now&#39; </a>

Lennar, Synopsys And More On CNBC's 'Final Trades'

On <a href="https://www.cnbc.com/video/2020/10/15/final-trades-jp-morgan-caterpillar-taiwan-semi-more.html">CNBC&#39;s &quot;Fast Money Halftime Report,&quot;</a> Liz Young recommended iShares National Muni Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mub#NYSE">MUB</a>) as a buy. She is bullish because of the prospect of higher taxes and she sees any fiscal package that includes state and local aid as another boost.
Jim Lebenthal wants to buy Caterpillar Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cat#NYSE">CAT</a>).
Stephen Weiss believes Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tsm#NYSE">TSM</a>) is a buy. He thinks the company reported a great quarter and guidance.
Josh Brown is a buyer of JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>).

'Fast Money Halftime Report' Picks For October 15

The latest round of <a href="https://www.benzinga.com/general/education/16/07/8248359/terms-of-the-trade-13f-filings">13F filings</a> from institutional investors is out, revealing to the world the stocks that some of the richest and most successful investors have been buying and selling.
<h3>Takeaways From 13F Season</h3>
Investors who follow particular fund managers can easily look up what each was buying and selling in the quarter, but other investors may be more interested in overall themes from 13F filings. The first quarter of 2020 was the worst first quarter in the history of the S&amp;P 500, so investors were particularly interested in how top investors played the dip.
<ul>
<li>Fund managers were dumping FANG stocks in the first quarter with a handful of exceptions. Tepper bought Netflix and Cooperman bought Facebook</li>
<li>Alphabet was one stock several fund managers were selling in the quarter. Tepper, Cooperman and Soros all reduced their holdings.</li>
<li>Einhorn and Ackman both bought Berkshire, while Buffett himself was buying PNC Financial and little else.</li>
<li>Bank stocks were popular among fund managers in the first quarter after the Federal Reserve cut interest rates to 0%. Einhorn bought Goldman Sachs, Cooperman bought JPMorgan and sold Citigroup and Wells Fargo, Buffett sold Goldman Sachs, and Soros sold Bank of America, Citigroup, JPMorgan and Wells Fargo.</li>
<li>Several fund managers traded ETFs to play particular themes. Rosenstein and Smith sold the SPY ETF, while Soros bought municipal bond and investment-grade corporate bond ETFs.</li>
</ul>
Here&rsquo;s a rundown of how the smart money was playing some of the most popular stocks last quarter.
See Also: <a href="https://www.benzinga.com/news/20/05/15940613/i-was-wrong-warren-buffetts-berkshire-hathaway-sold-6b-of-airline-stock-in-april">&#39;I Was Wrong&#39;: Warren Buffett&#39;s Berkshire Hathaway Sold $6B Of Airline Stock In April</a>
<h3>David Einhorn&rsquo;s Greenlight Capital</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Change Healthcare Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/chng#NASDAQ">CHNG</a>)</li>
<li>Crown Holdings, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cck#NYSE">CCK</a>)</li>
<li>Centene Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cnc#NYSE">CNC</a>)</li>
<li>Altria Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mo#NYSE">MO</a>)</li>
<li>American Express Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/axp#NYSE">AXP</a>)</li>
<li>Goldman Sachs Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gs#NYSE">GS</a>)</li>
<li>Berkshire Hathaway Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/brk-b#NYSE">BRK-B</a>)</li>
<li>Walt Disney Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dis#NYSE">DIS</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>General Motors Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gm#NYSE">GM</a>)</li>
<li>DXC Technology Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dxc#NYSE">DXC</a>)</li>
<li>Scientific Games Corp (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sgms#NASDAQ">SGMS</a>)</li>
<li>Echostar Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sats#NASDAQ">SATS</a>)</li>
</ul>
<h3>David Tepper&rsquo;s Appaloosa Management</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Twitter Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/twtr#NYSE">TWTR</a>)</li>
<li>Netflix Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nflx#NASDAQ">NFLX</a>)</li>
<li>QUALCOMM, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qcom#NASDAQ">QCOM</a>)</li>
<li>Tesla Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tsla#NASDAQ">TSLA</a>)</li>
<li>Microsoft Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>Alphabet Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>)</li>
<li>Facebook, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fb#NASDAQ">FB</a>)</li>
<li>Amazon.com, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/amzn#NASDAQ">AMZN</a>)</li>
<li>PG&amp;E Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pcg#NYSE">PCG</a>)</li>
<li>Alibaba Group Holding Ltd - ADR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/baba#NYSE">BABA</a>)</li>
</ul>
<h3>Leon Cooperman&rsquo;s Omega Advisors</h3>
Notable Q1 Buys/Increases:
<ul>
<li>JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>)</li>
<li>AMC Entertainment Holdings Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/amc#NYSE">AMC</a>)</li>
<li>Facebook</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>Fiserv Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/fisv#NASDAQ">FISV</a>)</li>
<li>United Airlines Holdings Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ual#NASDAQ">UAL</a>)</li>
<li>Alphabet Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>)</li>
<li>Carnival Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ccl#NYSE">CCL</a>)</li>
<li>Citigroup Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/c#NYSE">C</a>)</li>
<li>Wells Fargo &amp; Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/wfc#NYSE">WFC</a>)</li>
</ul>
<h3>Barry Rosenstein&rsquo;s Jana Partners</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Jack in the Box Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/jack#NASDAQ">JACK</a>)</li>
<li>Bloomin&#39; Brands Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/blmn#NASDAQ">BLMN</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>Conagra Brands Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cag#NYSE">CAG</a>)</li>
<li>Callaway Golf Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ely#NYSE">ELY</a>)</li>
<li>SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>)</li>
</ul>
<h3>Jeff Smith&rsquo;s Starboard Value</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Box Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/box#NYSE">BOX</a>)</li>
<li>eBay Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ebay#NASDAQ">EBAY</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>SPDR S&amp;P 500 ETF Trust</li>
<li>iShares Russell Midcap Index Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/iwr#NYSE">IWR</a>)</li>
<li>MGM Resorts International (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mgm#NYSE">MGM</a>)</li>
</ul>
<h3>Warren Buffett&rsquo;s Berkshire Hathaway</h3>
Notable Q1 Buys/Increases:
<ul>
<li>PNC Financial Services Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pnc#NYSE">PNC</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>Goldman Sachs Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gs#NYSE">GS</a>)</li>
<li>JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>)</li>
<li>Phillips 66 (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/psx#NYSE">PSX</a>)</li>
<li>Amazon.com</li>
<li>General Motors Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gm#NYSE">GM</a>)</li>
</ul>
<h3>George Soros&rsquo; Soros Fund Management</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Peloton Interactive Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pton#NASDAQ">PTON</a>)</li>
<li>Utilities SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlu#NYSE">XLU</a>)</li>
<li>ISHARES TR/NATL MUN BD ETF FD (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mub#NYSE">MUB</a>)</li>
<li>iShares IBoxx $ Invest Grade Corp Bd Fd (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lqd#NYSE">LQD</a>)</li>
<li>Activision Blizzard, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/atvi#NASDAQ">ATVI</a>)</li>
<li>E*TRADE Financial Corp (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/etfc#NASDAQ">ETFC</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>MONDELEZ INTERNATIONAL INC (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/mdlz#NASDAQ">MDLZ</a>)</li>
<li>Alphabet Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>)</li>
<li>Keurig Dr Pepper Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kdp#NYSE">KDP</a>)</li>
<li>JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>)</li>
<li>Citigroup Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/c#NYSE">C</a>)</li>
<li>Bank of America Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bac#NYSE">BAC</a>)</li>
<li>Wells Fargo &amp; Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/wfc#NYSE">WFC</a>)</li>
<li>Boeing Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ba#NYSE">BA</a>)</li>
</ul>
<h3>Carl Icahn&rsquo;s Icahn Capital</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Occidental Petroleum Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>)</li>
<li>Delek US Holdings Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dk#NYSE">DK</a>)</li>
<li>Hertz Global Holdings Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/htz#NYSE">HTZ</a>)</li>
<li>Newell Brands Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nwl#NASDAQ">NWL</a>)</li>
<li>Cheniere Energy, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lng#NYSE">LNG</a>)</li>
<li>Welbilt Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/wbt#NYSE">WBT</a>)</li>
</ul>
Notable Q1 Sells/Reductions: 
(none)
<h3>Bill Ackman&rsquo;s Pershing Square Capital</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Agilent Technologies Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/a#NYSE">A</a>)</li>
<li>Howard Hughes Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hhc#NYSE">HHC</a>)</li>
<li>Lowe&#39;s Companies, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/low#NYSE">LOW</a>)</li>
<li>Starbucks Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/sbux#NASDAQ">SBUX</a>)</li>
<li>Berkshire Hathaway Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/brk-b#NYSE">BRK-B</a>)</li>
<li>Hilton Hotels Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hlt#NYSE">HLT</a>)</li>
<li>Blackstone Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bx#NYSE">BX</a>)</li>
<li>Park Hotels &amp; Resorts Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pk#NYSE">PK</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>Chipotle Mexican Grill, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cmg#NYSE">CMG</a>)</li>
</ul>
See Also: <a href="https://www.benzinga.com/general/education/20/05/15979110/how-bill-ackman-successfully-navigated-coronavirus-market-volatility">How Bill Ackman Successfully Navigated Coronavirus Market Volatility </a>
<h3>John Paulson&rsquo;s Paulson &amp; Co.</h3>
Notable Q1 Buys/Increases:
<ul>
<li>Tiffany &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tif#NYSE">TIF</a>)</li>
<li>Kirkland Lake Gold Ltd (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/kl#NYSE">KL</a>)</li>
<li>NovaGold Resources Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ng#NYSE">NG</a>)</li>
</ul>
Notable Q1 Sells/Reductions:
<ul>
<li>SPDR Gold Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gld#NYSE">GLD</a>)</li>
<li>Discovery Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/disck#NASDAQ">DISCK</a>)</li>
<li>Agnico Eagle Mines Ltd (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/aem#NYSE">AEM</a>)</li>
<li>Caesars Entertainment Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/czr#NASDAQ">CZR</a>)</li>
</ul>

This could be the best Christmas gift for Republicans as the U.S. House of Representatives gave final nod on Wednesday to the biggest revamp of the US tax code in three decades, pushing forward a sweeping $1.5 trillion tax bill to President Donald Trump for his signature. The House passed the measure by <a href="https://www.ndtv.com/business/us-house-passes-tax-bill-donald-trump-says-it-means-jobs-jobs-jobs-jobs-1790372">224-201</a> votes, while the Republican-led Senate had approved it 51-48.
The final version agrees to &quot;give corporations a massive permanent tax break, temporarily cuts rates for individuals, and repeals the Affordable Care Act&#39;s individual mandate &mdash; a move that is estimated to leave <a href="https://www.vox.com/2017/12/20/16790040/gop-tax-bill-winners">13 million fewer insured</a> in the next 10 years.&quot;
The final version cuts &quot;the corporate rate from 35% to 21%, gives pass-through businesses like the Trump Organization a 20% tax deduction, raises the standard deduction, expands the child tax credit, and temporarily lowers individual rates across the board.&quot;
Let&#39;s take a look at the short, mid-and long-term ETF gainers and losers.
Long-Term Gainers 
U.S. Tax Reform Fund TAXR
This newly launched fund looks to offer capital gains by investing in market segments that &quot;will be impacted by the&nbsp;<a href="https://www.sec.gov/Archives/edgar/data/1683471/000089109217007342/e76038_497.htm">enactment of changes to the U.S. Tax Code</a>&quot; according to the issuer (read:&nbsp;<a href="https://www.zacks.com/stock/news/283302/house-passes-tax-bill-likely-etf-winners-amp-losers">House Passes Tax Bill: Likely ETF Winners &amp; Losers</a>).
iShares U.S. Real Estate ETF IYR
With Trump&#39;s tax&nbsp;<a href="http://www.newsweek.com/trumps-wealthy-new-york-friends-love-his-tax-bill-749477">bill proposing</a>&nbsp;to slash corporate tax of real estate developers by 14%, as well as cutting personal taxes for real estate behemoths, the real estate investors are likely to celebrate in the coming days. This along with still-moderate U.S. Treasury yields make this space a wining bet right now.
iShares US Dividend and Buyback ETF DIVB
The new fund looks to track the Morningstar US Dividend and Buyback Index. The Trump administration is also proposing a move from the current worldwide tax system to a territorial system, allowing companies to send their offshore profits back to the United States without extra taxes. This will result in extra cashes which may prove beneficial for shareholder value maximization (read:&nbsp;<a href="https://www.zacks.com/stock/news/283330/what-makes-ishares-dividend-and-buyback-etf-launch-timely">What Makes iShares&#39; Dividend and Buyback ETF Launch Timely?</a>).
Mid-Term Winners
Republican Policies Fund GOP 
The passing of the tax bill is a sign of success for the GOP. This is why investors&#39; interest in this fund is here to stay. This new fund targets market segments that are likely to be moved (deemed by the issuer) by the enactment of Republican Policies.
Short-Term Winners
Consumer Discretionary Select Sector SPDR ETF XLY
Per a Tax Policy Center analysis, the bill will lower taxes for Americans in all income groups in 2018, but <a href="https://www.vox.com/2017/12/20/16790040/gop-tax-bill-winners">increasing after-tax income</a> by an average of 2.2%. Plus, the tax cut for individuals will gradually decrease over time and completely close in 2025.
Analysts&#39; explanation is that the &quot;thresholds for individual tax brackets are adjusted according to chained CPI, a lower measure of inflation than standard CPI, which is used currently. This will increase tax revenue over time by pushing people into higher tax brackets.&quot; This means consumer discretionary stocks and ETFs will be short-term gainers and long-term losers.&nbsp;
iShares Russell 2000 ETF IWM
Investors should be choosy while picking small-cap ETFs as a tax-reform play. This is because tax cuts will help corporations to generate more profits. Plus, realizing the tax cuts, people will likely boost its expenditure. Since small-cap stocks are domestically focused, these higher outlays will boost the business of the small corporations (read: <a href="https://www.zacks.com/stock/news/286440/tax-reform-a-boon-or-bane-for-smallcap-etfs">Tax Reform: A Boon or Bane for Small-Cap ETFs?</a>).
But there is a provision in the tax blueprint that calls for limiting &quot;deductions to 30% of EBITDA (earnings before interest, taxes, depreciation, and amortization) for four years, and 30% of EBIT after that.&quot; Many small-cap stocks are debt-reliant for their survival and lack cash. So, in the long run things may not look that rosy for small-caps.
Losers 
SPDR S&amp;P Homebuilders ETF&nbsp;XHB 
Homebuilders are expected to lose as the new tax bill lowers the value of the mortgage interest deduction to $750,000 from $1 million, thereby limiting the purchase of luxury homes. As result, housing ETFs like XHB may come under pressure.
iShares National Muni Bond ETF MUB
Muni bonds may lose luster. These bonds are excellent choices for investors seeking a steady stream of tax-free income. But with President Trump lowering personal income tax rates, investors&#39; desire for a tax shelter in munis may be quelled. This may put pressure on funds like MUB (read: <a href="https://www.zacks.com/stock/news/261953/trump-tax-plan-amp-muni-bond-etfs-what-investors-need-to-know">Trump Tax Plan &amp; Muni Bond ETFs: What Investors Need to Know</a>).
Health Care Select Sector SPDR ETF XLV
With the repeal of ObamaCare individual insurance mandate in the final bill, health care sector understandably came under pressure. Funds like XLV could thus feel pressure(read: <a href="https://www.zacks.com/stock/news/279399/healthcare-etfs-head-to-head-xlv-vs-vht">Healthcare ETFs Head to Head: XLV vs. VHT</a>).
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Specialty ETFs

Futures

ETFs

DIVB

iShares Trust Dow Jones US Real Estate Fund Index

TAXR

Select Sector SPDR-Consumer Discretionary

Tax Bill: What ETF Investors Need To Know

Income investors embrace <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/03/9227950/who-is-buying-municipal-bonds">municipal bonds</a> as a way of generating income and earning some tax advantages. Yet the S&amp;P National AMT-Free Municipal Bond Index has an average yield of just over 2 percent and a 30-day SEC yield of 1.72 percent, indicating that municipal bonds can leave income investors wanting more yield.
As is the case with other corners of the bond market, there are high-yield opportunities avail&shy;able with municipal bonds. Just see the recent new issue from Chicago and <a href="https://www.benzinga.com/news/17/06/9564643/muni-bond-expert-on-puerto-rico-its-going-to-be-more-than-a-haircut">the declining credit quality of Puerto Rico municipals</a>. The First Trust Municipal High Income ETF (NASDAQ: <a class="ticker" href="/stock/fmhi#NASDAQ">FMHI</a>) is a new ETF providing access to junk-rated municipal bonds.
FMHI&#39;s primary objective is to deliver tax-exempt income with the potential for capital appreciation. The new ETF is actively managed.
<h3>
	A Rigorous Approach</h3>
While active management has taken its lumps in the equity space, some investors like the idea of this management style in the bond universe, particularly when it comes non-investment grade fare.
&ldquo;The fund is managed by First Trust using a disciplined approach that focuses on a combination of quantitative analysis and fundamental research,&rdquo; <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FMHI">according to First Trust</a>. &ldquo;In seeking attractive income, the fund will focus on non-rated bonds, lower investment-grade bonds and below investment-grade or &#39;high yield&#39;&nbsp;municipal bonds, while offering daily liquidity and full transparency of holdings.&rdquo;&nbsp;
FMHI&#39;s management team is currently focusing on bonds with maturities ranging from five to 18 years, which it believes can provide some buffer against rising Treasury yields.
<h3>
	Advantages And Challenges</h3>
Improving fiscal health, thanks to higher taxes in some states, has bolstered the credit profiles of some municipalities, in turn driving yields lower&nbsp;on some muni debt.
Some municipalities face revenue issues and the specter of declining credit quality. Those concerns could highlight the advantages of FMHI&#39;s active management.
&ldquo;Some municipalities have faced increasing economic challenges, which we believe has raised the importance of active credit analysis and municipal bond expertise,&rdquo; said First Trust. &ldquo;Unlike index-based ETFs that may simply rely on rating agencies for credit analysis, we believe it is critical to understand an issuer&rsquo;s ability to meet its financial obligations. Active portfolio management allows the fund managers to make portfolio adjustments as conditions change.&rdquo;
FMHI charges 0.55 percent per year, or $55 on a $10,000 investment.
Related Links:
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<a href="http:// https://www.benzinga.com/trading-ideas/long-ideas/17/11/10269570/reversing-to-good-fortune-with-a-new-etf">Reversing The S&amp;P 500</a>

Bonds

New ETFs

FMHI

Adding Some Yield To The Muni Trade

With the S&amp;P 500 trading within a stone&rsquo;s throw of all-time highs and Goldman Sachs recently drawing <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/06/9590211/goldman-compares-faamg-stocks-to-high-flyers-of-the-dot-">calculated comparisons</a> between leading tech stocks today to those leading the dot-com bubble in 2000, investors are growing increasingly concerned that the stock market may once again be entering bubble territory. According to former Federal Reserve chairman Alan Greenspan, investors should be much more concerned about bond prices.
In a <a href="https://www.bloomberg.com/news/articles/2017-07-31/no-bubble-in-stocks-but-look-out-when-bonds-pop-greenspan-says">new interview</a>, Greenspan said interest rates remain well below where they should be. He expects rates to experience a rapid rise at some point in the near future.
&ldquo;We are experiencing a bubble, not in stock prices but in bond prices,&rdquo; Greenspan said. &ldquo;This is not discounted in the marketplace.&rdquo;
Related Link: <a href="https://www.benzinga.com/etfs/sector-etfs/17/07/9769926/yellen-puts-a-crimp-in-financial-rally">Yellen Puts A Crimp In Financial Rally</a>
<h3>Differing Opinions</h3>
Many bond investors are predicting the secular decline in interest rates that has persisted for decades will continue in the long term, but Greenspan sees a potential inflection point when global central banks end their accommodative monetary policies.
A bursting bond bubble will also drag down the stock market, Greenspan said.
<h3>Fed Model</h3>
Greenspan is a subscriber to the Fed Model of economics, in which stock and bond values should be compared only to each other on a relative basis. The current gap between 10-year adjusted bond yields (0.47 percent) and the S&amp;P 500&rsquo;s earnings yield (4.7 percent) is 21 percent higher than its 20-year average.
In recent years, large upticks in bond yields haven&rsquo;t triggered bond and stock market sell-offs. Ten-year Treasury yields spiked above 3 percent in 2013 and 2016 didn&rsquo;t result in stock market weakness.
Greenspan says stock market resiliency will be put to the test as the U.S. Federal Reserve begins to unwind its $4.5 billion balance sheet and other central banks around the world dial back their economic stimulus plans.
<h3>So Far, So Good In 2017</h3>
So far this year, it has been business as usual for stocks and <a href="https://www.benzinga.com/media/cnbc/17/07/9823700/bond-etfs-set-to-surge-in-popularity">bond ETFs</a>:&nbsp;
<ul>
<li>
		The SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) is up 10.6 percent.</li>
<li>
		The iShares Barclays 20+ Yr Treas.Bond (ETF) (NASDAQ: <a class="ticker" href="/stock/tlt#NASDAQ">TLT</a>) is up 4.3 percent.</li>
<li>
		The iShares iBoxx $ High Yid Corp Bond (ETF) (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) is up 2.4 percent.</li>
<li>
		The iShares IBoxx $ Invest Grade Corp Bd Fd (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>) is up 3.3 percent.</li>
<li>
		The iShares S&amp;P Natnl AMT &ndash; Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) is up 2.3 percent.</li>
</ul>

Analyst Color

Short Ideas

Economics

Federal Reserve

Analyst Ratings

Movers

iShares Trust Barclays 20+ Year Treasury Bond Fund

Bond Bubble About To Burst?

Interest rates are rising in the U.S., but remain well below an area that&#39;s considered historically average. In other major developed markets, benchmark borrowing costs are at or near record lows, or in some cases, negative.
That is to say investors in ex-U.S. developed markets are looking for income and they&#39;re looking to some U.S. bonds to provide that income. A popular destination has been low-risk U.S. municipal bonds, although the iShares National Muni Bond ETF (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>), the largest municipal bond exchange traded fund, has lost $381.4 million in assets this year.
There are valid reasons for foreign investors embracing U.S. municipal bonds, including a &quot;strong U.S. dollar or perspectives of a strong for longer U.S. dollar,&rdquo; <a href="http://www.indexologyblog.com/2017/03/27/rieger-report-why-foreign-investors-like-u-s-municipal-bonds/">S&amp;P Dow Jones Indices</a> said. &ldquo;U.S. municipal bonds, whether tax-free or taxable, offer incremental yield relative to the negative or near zero yield environments seen in the Eurozone and Japan. The relatively high quality of investment grade municipal bonds to other asset classes such as U.S. corporate bonds and in some cases sovereign bonds.&rdquo;
See Also: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/03/9216189/an-income-etf-that-lowers-rate-risk">An Income ETF That Lowers Rate Risk</a>
MUB has $7.8 billion in assets under management, so its year-to-date outflows are small relative to its overall size. Underscoring the point that investors want yield, the VanEck Vectors High-Yield Municipal Index ETF (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>) has seen new money come into it this year.
HYD has a 30-day SEC yield of 4.4 percent, which is high among municipal ETFs. The ETF has an effective duration of 7.5 years. HYD allocates over 28 percent of its weight to California and Illinois munis, indicating that investors who have allocated more than $87 million to the ETF this year are comfortable embracing the potentially significant public pension risk that those two states bring to the table.
&ldquo;Foreign holdings of debt issued by U.S. states and local governments rose 16% in the last quarter of 2016, reaching a record level of $106.4 billion,&rdquo; VanEck said <a href="http:// https://www.vaneck.com/blogs/muni-nation/foreign-investor-interest-municipal-bonds-grows/">in a note out earlier this month</a>. &ldquo;While foreign ownership represents just a small fraction of the $3.8 trillion U.S. municipal bond market, it is a growing segment that has risen steadily since 2000. In the past two years alone, foreign ownership of muni bonds has increased 32%, from $80.6 billion at the end of 2014 to its present $106.4 billion.&rdquo;

Market Vectors High Yield Municipal Index ETF

Who Is Buying Municipal Bonds?

While the Federal Reserve waited until December to raise interest rates, fixed income investors used the first 11 months of 2016 to warm to municipal bonds and the related exchange-traded funds.
The popularity of municipal bond ETFs further underscores investors&#39; desired for income and yield while highlighting the belief that many bond investors believe state and municipal balance sheets are in solid shape. Additionally, the tax-exempt status of municipal bonds makes the asset class a favorite among retirees and investors nearing retirement.
<h3>ETF MUB Benefits From Tax-Exempt Status</h3>
The iShares S&amp;P Natnl AMT - Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) is among the ETFs benefiting from those themes. MUB follows the S&amp;P National AMT-Free Municipal Bond Index, which is the equivalent of a cap-weighted benchmark for an equity-based index fund. Said another way, MUB&#39;s 3,245 holdings <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/07/8250328/munis-from-these-states-are-boosting-municipal-bond-etfs">are weighted by debt outstanding</a>.
&ldquo;Because the fund weights its holdings by the amount of outstanding debt, the portfolio skews to the most-indebted regions,&rdquo; said Morningstar <a href="http://news.morningstar.com/articlenet/article.aspx?id=788913">in a recent note</a>. &ldquo;As a result, negative regional events, such as Detroit&rsquo;s bankruptcy (2013) and Hurricane Sandy (2012), can have an outsize impact on the fund&rsquo;s performance. At the end of December 2016, the fund had greater exposure to California and New York than its municipal national intermediate Morningstar Category peers.&rdquo;
California and New York munis combine for almost 43 percent of MUB&#39;s weight. Over the long run, assuming MUB&#39;s index weights do not significantly change, the ETF could be challenged by the myriad budget and <a href="http://ijr.com/2015/07/364047-new-ranking-review-50-states-fiscal-health-two-interesting-hidden-secrets/">fiscal solvency issues</a> facing California and New York, including abilities to cover pension funding, short obligations or sudden spikes in demand for services.
Four states &mdash; Montana, North Dakota, South Dakota and Wyoming &mdash; are not represented in MUB&#39;s lineup. Unfortunately for MUB and its investors, North Dakota and South Dakota are two of the most fiscally solvent states in the country.
<h3>Risks And Rewards</h3>
Still, in MUB&#39;s favor is a lack of credit risk and an effective duration of less than 6.3 years, putting in the middle of the interest rate risk spectrum.
&ldquo;The fund&rsquo;s geographic risk is partially offset by its relatively conservative and diverse portfolio. More than 80 percent of the fund&rsquo;s assets are invested in securities rated AA or above. Most peers take greater credit risk, though it has a similar interest-rate risk profile to the category average. The resulting portfolio offers a lower yield to maturity than the category average. In addition, it doesn&rsquo;t invest in bonds issued by U.S. territories, including Puerto Rico, and spreads its risks across more than 3,000 holdings,&rdquo; added Morningstar.
Investors added $2.44 billion to MUB last year.

An Effective Way To Broad Municipal Bond Exposure

The combination of interest rates remaining lower for longer and investors demanding more income and yield have been driving forces behind the resurgence of municipal bond exchange-traded funds this year.
One thing fixed income investors have heard plenty about for over a year now is the impact of low oil prices on the high-yield bond market and the corresponding exchange-traded funds.
Some of the biggest names in the junk bond ETF space are either afflicted by large weights to energy bonds, risky CCC-rated debt or both. Still, investors<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7813048/despite-risks-investors-flock-to-junk-bond-etfs"> have been racing back</a> to junk bond ETFs as oil prices are rebounding.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/07/8246085/yield-works-for-the-other-dow-etf">Yield Works For The Other Dow ETF</a></bzrelatedlink>
Although there has been some chatter regarding the impact of falling oil prices on municipal bonds, conservative fixed income investors have been embracing municipal bond ETFs, even longer duration funds, as the Federal Reserve has put off raising interest rates.
<h3>MUB</h3>
Up 3.5 percent year-to-date and home to nearly $1.2 billion in new assets this year, the iShares S&amp;P Natnl AMT - Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) underscores the strength in municipal bonds in 2016. Still, investors should look closely to see which states&#39; munis are leading the asset class higher.
&ldquo;What states are leading the pack? The answer includes some of the states that have been performance drags in the past. Municipal bonds issued within Puerto Rico, New Jersey and Illinois are in the top five at this point in 2016. Puerto Rico revenue bonds have held on to their bounce off the bottom despite Puerto Rico&rsquo;s default earlier this month. As for bonds from other states, the demand for bonds with any incremental yield over other bonds has helped push up the prices of bonds issued within states such as New Jersey and Illinois,&rdquo; said S&amp;P Dow Jones Indices Head of Fixed Income J.R. Rieger <a href="http://www.indexologyblog.com/2016/07/24/rieger-report-muni-bonds-the-states-leading-and-lagging-2016/">in a recent note</a>.
MUB, which tracks the S&amp;P National AMT-Free Municipal Bond Index, allocates nearly seven percent of its combined weight, to New Jersey and Illinois munis. California and New York combine for 43.2 percent of the ETF&#39;s weight.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/07/8240348/an-old-school-smart-beta-etf-is-having-a-solid-year">An Old School Smart Beta ETF Is Having A Solid Year</a></bzrelatedlink>
&ldquo;Bonds from Virgin Islands are suffering in the shadow of Puerto Rico&rsquo;s struggles. Municipal bonds from oil states such as New Mexico and North Dakota remain in positive return territory but are beginning to show the impact of the economic drag low priced oil has created,&rdquo; added Rieger.
Those states have scant representation in MUB. The ETF yields 1.14 percent with an effective duration of 4.7 years.
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Munis From These States Are Boosting Municipal Bond ETFs

Despite record-low yields and growing concerns about the health of many U.S. local governments, Citi analyst Vikram Rai believes investors should still be buying municipal bonds. According to Rai, the situation is far from ideal, but municipal bonds offer advantages over other fixed-income investments that make them worthwhile.
U.S. municipal bonds can provide tax-exemptions for qualified investors and alternatives for foreign investors trying to escape negative yielding local debt.
Rai admits that at first glance, the risk/reward balance of many municipal bonds at current yields doesn&rsquo;t seem very compelling. However, Citi sees no catalyst for higher yields or steeper curves.
Rai sees a potential pension crisis ahead for many municipalities, but he believes investors have gotten prematurely spooked by recent headlines. He added that being right too early can be the same as being wrong.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/06/8160546/the-100-trillion-bond-market-has-bigger-concerns-than-br">The $100 Trillion Bond Market Has Bigger Concerns Than Brexit</a></bzrelatedlink>
&ldquo;The pension story is a slow paced tragic tale and in most cases the risk of non-payment is far from imminent,&rdquo; he explained.
He admitted there is plenty of headline risk in the months ahead, which could lead to short, painful yield spikes. Risks include mutual fund outflows, hawkish Federal Reserve decisions and the 2016 presidential election.
So far this year, the iShares S&amp;P Natnl AMT &ndash; Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) is up 2.9 percent.
Disclosure: The author holds no position in the stocks mentioned.

Even In A Low-Yield Environment, Municipal Bonds May Nudge Out Other Taxable Assets

Six years after Meredith Whitney told "60 Minutes" that municipal bonds were the &ldquo;largest threat to the U.S. economy,&rdquo; Whitney may finally be starting to feel some vindication. For years, Whitney was chastised by the <a href="http://www.wsj.com/articles/SB10000872396390444549204578021380172883800">Wall Street Journal</a> and others for being totally wrong on her call for 50 to 100 &ldquo;sizable&rdquo; defaults in the municipal bonds market, but it turns out Whitney may have been early instead of wrong.
<h3>Some Serious Insight</h3>
&ldquo;Major municipalities across the United States and other parts of the developed world still remain in financial dire straits despite the post-2009 global market rebound,&rdquo; Strategic Preservation Partners&rsquo; <a href="https://www.linkedin.com/pulse/three-canaries-global-coal-mine-government-bond-bust-finally-bostrom">Kirk Bostrom</a> explained.
&ldquo;For example, large states such as Michigan, Illinois, New Jersey, Connecticut, Nevada even California have significant outstanding debt and unfunded pension liability problems.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/node/8089042">The Great Beer Catastrophe: Venezuela&#39;s Economic Crisis Has Sobering Consequences</a></bzrelatedlink>
Puerto Rican <a href="http://blogs.wsj.com/moneybeat/2016/05/02/puerto-ricos-new-default-sets-muni-market-record/">municipal bonds</a> accounted for more than $5 billion of the record $5.65 billion in municipal bond defaults through the first four months of 2016.
<h3>The Situation At Hand</h3>
Things have gotten so bad <a href="http://www.bloomberg.com/news/articles/2016-06-08/blackrock-calls-for-a-muni-market-strike-in-budgetless-illinois">in Illinois</a> that BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) recently urged bond investors to give the state the cold shoulder until it cleans up its act, according to a Bloomberg report.
Connecticut was also <a href="http://www.cnbc.com/2016/05/24/reuters-america-update-2-connecticut-pays-more-to-borrow-following-downgrades.html">recently forced</a> to pay a higher premium on its latest round of municipal bond sales after the state&rsquo;s debt was downgraded to AA- by both Fitch and S&amp;P, CNBC stated.
Yet, despite the increasing uneasiness in the municipal bond market, the New York Times reported that investors continue to pour money into municipal bonds. In fact, U.S. Bank&rsquo;s <a href="http://www.newsmax.com/Finance/StreetTalk/Municipal-Bond-Defaults-Investors/2016/04/26/id/725934/">Dan Heckman</a> told the Times back in April that there had been 27 consecutive weeks of inflows into municipal bond funds since late 2015.
For the good of all Americans, we should hope that Meredith Whitney&rsquo;s prediction of a catastrophic collapse in the municipal bond market is not imminent. However, so far in 2016, her call is looking more and more like it may have been early rather than wrong.
So far this year the iShares S&amp;P Natnl AMT &ndash; Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) is up 1.7 percent.
Disclosure: The author holds no position in the stocks mentioned.

CNBC

Wall Street Journal

Meredith Whitney's Muni Market Call May Have Just Been 6 Years Too Early

Oil prices are on the mend this year, but the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) would need to more than triple to sniff its 2014 highs. USO, which tracks front-month West Texas Intermediate futures, would need to nearly quadruple to come within striking distance of its 2012 highs.
Heading into 2016, there was some concern from bond market observers about the impact of lower oil prices on municipal bonds. However, exchange-traded funds holding municipal bonds have rebuffed those concerns. In fact, investors have been revisiting municipal bond ETFs, such as the Market Vectors High-Yield Municipal Index ETF (Market Vectors ETF Trust (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>)) and the iShares S&amp;P Natnl AMT - Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) in significant fashion.
<h3>ETF Performances</h3>
Underscoring the notion that investors are not overly concerned about oil&#39;s impact on the muni market and focusing more on the Federal Reserve&#39;s reluctance to raise interest rates, two of the six ETFs that hit 52-week highs Monday were muni ETFs, including HYD. Of the other four ETFs in the 52-week high club, one was an ETF of ETFs that features a hefty weight <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6555550/oil-prices-could-be-problematic-for-these-bonds-and-etfs">to a muni bond fund</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/05/7986634/goldman-lowers-oil-price-projections-sees-return-to-surp">Goldman Lowers Oil Price Projections, Sees Return To Surplus In 2017</a></bzrelatedlink>
<h3>The Muni Element</h3>
&ldquo;The municipal bond market has been buffeted by pension shortfalls, Puerto Rico, Chicago, Detroit and other news worthy events. Oil, however, is not yet one of the major forces impacting the municipal bond market. In February 2016 oil dependent states and their municipal bonds were showing signs of weakening as the price of oil continued its plummet,&rdquo; said S&amp;P Dow Jones Indices Global Head of Fixed Income J.R. Rieger <a href="http://www.indexologyblog.com/2016/05/15/rieger-report-oil-state-municipal-bonds-doing-fine/"> in a note out Monday</a>.
A benefit of municipal bond ETFs when it comes to the oil price scenario is that, outside of Texas, most of these ETFs, do not feature large allocations to major oil-producing states. For example, Texas munis are 7.6 percent of HYD&#39;s weight, but that is just the ETF&#39;s fourth-largest state allocation. Louisiana is 2.5 percent of HYD&#39;s weight and the ETF features no significant exposure to Alaska and North Dakota muni bonds.
&ldquo;Now, nearly three months later those bonds with the exception of North Dakota have shown resilience and have performed similarly to the overall municipal bond market,&rdquo; added Rieger.

Commodities

Municipal Bond ETFs Rebuff Weak Oil Prices

Among the fixed income exchange-traded funds that find themselves in the sweet spot thanks to the Federal Reserve consistently passing on another interest rate hike are municipal bond funds, particularly those of the longer-dated variety.
Although there has been some chatter regarding the impact of falling oil prices on municipal bonds, conservative fixed income investors have been embracing municipal bond ETFs, even longer duration funds, as the Federal Reserve has put off raising interest rates.
<h3>A Diamond In The Rough</h3>
The iShares S&amp;P Natnl AMT - Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) is among the municipal bond ETFs benefiting from investors&#39; renewed affinity for the asset class. MUB, home to $6.7 billion in assets under management, is up 2.2 percent year-to-date and resides just pennies below its all-time high. Of MUB&#39;s $6.7 billion in assets, more than $702 million have arrived this year.
However, investors that think they are late to the municipal bond ETF party need not fret because the asset class looks like an appealing fixed income idea for the second half.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7813049/dont-be-shy-embrace-this-bond-etf">Don't Be SHY: Embrace This Bond ETF</a></bzrelatedlink>
&ldquo;<a href="https://www.blackrock.com/investing/insights/municipal-monthly">U.S. municipal debt</a> looks attractive against other bond sectors, and we see potential for inflows after munis&rsquo; recent strong performance. The sector&rsquo;s tax-exempt status is another plus, and munis are a portfolio diversifier, with negative correlations to equities and high yield, our analysis shows. Finally, munis also have been the least volatile fixed income sector, based on daily moves in the past three years,&rdquo; said BlackRock<a href="https://www.blackrockblog.com/2016/05/06/investing-opportunities/"> in a recent note</a>.
<h3>Holdings, State Allocations</h3>
MUB, which is nearly nine years old, holds over 3,000 municipal bonds and has an effective duration of 4.72 years. Duration measures a bond&#39;s sensitivity to changes in interest rates. MUB&#39;s weighted average coupon is 4.66 percent. 
California and New York combine for 43 percent of MUB&#39;s state lineup. No other state commands a double-digit allocation in the ETF, which has a 30-day SEC yield of 1.33 percent. MUB features munis issued by 45 states and the District of Columbia.
&ldquo;Within the sector, we favor revenue bonds backed by revenue streams such as water or sewer utilities over general obligation debt that is vulnerable to local pension deficits. We also favor selected exposure to high yield munis, except those of troubled Puerto Rico,&rdquo; added BlackRock.
Texas is MUB&#39;s third-largest state allocation, but at just 9 percent of MUB&#39;s weight, the Lone Star State does not even command half the weight the ETF devotes to New York. Following Texas, MUB&#39;s exposure to major oil-producing states is scant. The two missing: major oil producers Louisiana and North Dakota. Additionally, Oklahoma is just a quarter of a percent of the ETF&#39;s weight.

A Bond ETF Idea For The Second Half

One thing fixed income investors have heard plenty about for over a year now is the impact of low oil prices on the high-yield bond market and the corresponding exchange traded funds.

	Some of the biggest names in the junk bond ETF space are either afflicted by large weights to energy bonds, risky CCC-rated debt or both. Still, investors<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7813048/despite-risks-investors-flock-to-junk-bond-etfs"> have been racing back</a> to junk bond ETFs as oil prices are rebounding.&nbsp;

	Although there has been some chatter regarding the impact of falling oil prices on municipal bonds, conservative fixed income investors have been embracing municipal bond ETFs, even longer duration funds, as the Federal Reserve has put off raising interest rates. Just look at the iShares National AMT-Free Muni Bond ETF (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>). Already the largest municipal bond ETF with $6.48 billion in assets under management, MUB has added nearly $445 million<a href="http:// http://www.benzinga.com/trading-ideas/long-ideas/16/03/7748376/investors-like-these-bond-etfs-too"> in new assets this year</a>.

	MUB&#39;s sturdiness and its inflows can be seen as signs that municipal bonds have been relatively immune to energy-related bond market volatility.

	&ldquo;While some states are major oil producers, the impact of oil&rsquo;s slide has been fairly limited. Texas, the biggest oil producer, is also a big storer of oil &mdash; an advantage now given extremely elevated supplies. Many of the other energy-producing states are not large issuers of municipal debt,&rdquo; according to a <a href="https://www.blackrockblog.com/2016/04/11/market-oil-doesnt-matter/">recent BlackRock note</a>.&nbsp;

	Texas is MUB&#39;s third-largest state allocation, but at just 9 percent of MUB&#39;s weight, the Lone Star state does not even command half the weight the ETF devotes to New York. California is MUB&#39;s largest state weight at 23.1 percent.

	Following Texas, MUB&#39;s exposure to major oil-producing states is scant. The ETF features munis issued by 48 states. The two missing: Major oil producers Louisiana and North Dakota. Additionally, Oklahoma is just a quarter of a percent of the ETF&#39;s weight.

	A case can be made some municipal bonds are actually benefiting from lower oil prices.

	&ldquo;At a more granular level, consider that savings at the pump have traditionally resulted in <a href="http://www.businessinsider.com/low-gas-prices-good-for-tobacco-industry-2015-9" target="_blank">increased tobacco consumption</a> (the logic being that the excess cash is used to fund tobacco habits). We&rsquo;ve seen evidence of this recently in the performance of corporate vs. municipal high yield. Whereas the energy sector wreaked havoc on corporate high yield last year, tobacco was the best-performing segment of the municipal high yield market. For investors, the key takeaway is that not all high yield is created equal,&rdquo; adds BlackRock.

Another Reason To Like Municipal Bond ETFs

Investors are loving fixed income exchange traded funds this year. An oft-mentioned anecdote in this space has been that six of this year&#39;s top 10 asset-gathering ETFs are bond funds and that remains the case. In fact, the third and fourth ETFs in terms of new assets added this year are bond funds.

	A cursory glance would indicate that investors&#39; affinity for fixed income ETFs has mostly been directed at U.S government and high-yield corporate bond funds. However, an increasingly sanguine outlook for Federal Reserve action, or lack thereof, on interest rates this year is drawing plenty of income investors to municipal bond ETFs.

	Rebounding oil prices are helping <a href="http:// http://www.benzinga.com/trading-ideas/long-ideas/16/02/6555550/oil-prices-could-be-problematic-for-these-bonds-and-etfs">as there has been concern</a> that some municipalities dependent on oil for revenue could be sapped by low oil prices. That has not yet permeated the broad municipal bond market as investors are flocking to ETFs such as the iShares National Muni Bond ETF (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) and the SPDR Nuveen Barclays Short Term Municipal Bond (NYSE: <a class="ticker" href="/stock/shm#NYSE">SHM</a>).

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7748374/a-forgotten-rally-for-this-etf">A Forgotten Rally For This ETF</a>

	&ldquo;Increased investor appetite for treasuries has also meant that the excess of muni fund flows over treasury fund flows narrowed over the past few months but still favour munis as the asset class continues to see strong inflows,&rdquo; said Markit <a href="http://www.markit.com/Commentary/Get/21032016-Credit-Investors-continue-to-flock-towards-munis-amid-volatility">in a recent note</a>.&nbsp;

	Year-to-date, MUB and SHM have added $389.2 million and $185.6 million, respectively in new assets. Investors&#39; enthusiasm for SHM is understandable as the ETF has a modified adjusted duration of just 2.8 years, limiting its sensitivity to rising interest rates. SHM has a 30-day SEC yield of just 0.67 percent, but that&#39;s better than most savings account and there is little credit risk in this ETF as essentially all of the fund&#39;s holdings are rated AAA or AA.

	Comparing munis against Treasurys reveals the former might be the better for bond investors right now.

	&ldquo;A high muni/treasury ratio implies munis are more attractive than treasuries given that the historical muni/treasury ratio has been around 0.80. As of 17th March, muni/treasury ratios show the 10-yr is currently 0.98 and the 30-yr 1.06,&rdquo; adds Markit.

	Investors have also displayed a thirst for high-yield munis with the Market Vectors High-Yield Municipal ETF (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>). HYD has added nearly $242 million in new assets this year.

	The $2 billion HYD carries a 30-day SEC yield of 4.3 percent. Although this is a high-yield fund, almost 35 percent of its holdings carry investment-grade ratings and over 36 percent are rated BB or B.

Investors Like These Bond ETFs, Too

Although the Federal Reserve raised interest rates for the first time in almost decade last month and plenty of pundits believe multiple rate hikes are on the way this year, some investors are finding comfort in municipal bond exchange-traded funds.
The question savvy investors need to be considering right now is whether municipal bonds are inexpensive relative to other fixed income asset classes. That query can be answered by evaluating the tax-free yield to U.S. Treasury yield ratio.
<h3>Tax-Free Yield To U.S. Treasury Yield Ratio</h3>
&ldquo;Are U.S. municipal bonds rich or cheap relative to other fixed income asset classes? It is all relative. As of January 15th 2016, the yield to worst of investment grade bonds tracked in the <a href="http://us.spindices.com/indices/fixed-income/sp-national-amt-free-municipal-bond-index">S&amp;P National AMT-Free Municipal Bond Index </a>was a 1.8 percent (tax-free yield). The Taxable Equivalent Yield (TEY) of those bonds using a 35 percent tax-rate assumption would be 2.77 percent (the required yield of a taxable bond to keep the same interest income after taxes),&rdquo; said S&amp;P Dow Jones Indices Managing Director and Global Head of Fixed Income J.R. Rieger <a href="http://www.indexologyblog.com/2016/01/18/the-rieger-report-munis-rich-or-cheap-its-all-relative/">in a recent note</a>.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/pressreleases/16/01/b6124029/mackay-municipal-managers-announces-top-five-municipal-market-insights-">MacKay Municipal Managers Announces Top Five Municipal Market Insights For 2016</a></bzrelatedlink>
<h3>Large Municipal Bond ETFs</h3>
Investors can gain exposure to the S&amp;P National AMT-Free Municipal Bond Index with the iShares S&amp;P Natnl AMT - Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>), one of the largest municipal bond ETFs. The $6 billion MUB has an effective duration of 4.74 years and 78 percent of the ETF&#39;s nearly 2,900 holdings are rated either AA or AAA, <a href="https://www.ishares.com/us/products/239766/MUB?referrer=tickerSearch">according to iShares data</a>.
&ldquo;By most measures, the yields of municipal bonds remain higher than the historical trend. For example, the investment grade non-callable municipal bonds maturing in 2024 tracked in the <a href="http://us.spindices.com/indices/fixed-income/sp-amt-free-municipal-series-2024-index">S&amp;P AMT-Free Municipal Series 2024 Index</a> ended at a yield of 1.87 percent verses the yield of the <a href="http://us.spindices.com/indices/fixed-income/sp-bgcantor-current-10-year-us-treasury-index">S&amp;P/BGCantor Current 10 Year U.S. Treasury Bond Index</a> yield of 2.03 percent...or 92 percent of the U.S. Treasury yield,&rdquo; added Rieger.
However, Rieger also noted that compared to investment-grade corporates, tax-free munis currently appear richly valued. That could be a sign that investors looking for a &ldquo;good deal&rdquo; with fixed income ETFs without sacrificing credit quality might be better off with a fund such as the iShares iBoxx $ Invest Grade Corp Bd Fd (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>) than MUB.
However, LQD&#39;s effective duration is almost eight years, but its 30-day SEC yield of 3.34 percent is well above the 1.53 percent found on MUB. Investors have added $55.4 million to MUB this year compared to inflows of over $252 million for LQD.
Image Credit: <a href="https://pixabay.com/en/wall-street-financial-new-york-wall-582918/">Public Domain</a>

Intraday Update

Finding Value In Municipal Bond ETFs

The October jobs report, delivered earlier Friday, was enough to spark a surge in Treasury yields. Ten-year Treasury yields are trading higher by four percent at this writing, bringing the one-month climb in yields on the benchmark U.S. government bond to 13.3 percent.

	&nbsp;

	Although fixed income ETFs have been among <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5956578/junk-bond-etfs-old-black-is-the-new-black-again">this year&#39;s most prolific asset gatherers</a> as invesors have recently piled into both investment-grade and high-yield corporate bond funds, longer duration ETFs will be vulnerable as yields in anticipation of the Federal Reserve raising interest rates next month. Municipal bond funds, previously favored destinations for income investors, are not exceptions to that rule. However, that does not mean the asset class should be abandoned outright.

	&nbsp;

	&ldquo;Municipal bond mutual funds gathered $2.8 billion in the four-week period ended October 28, according to Investment Company Institute, even as muni bond ETFs added $593 million of inflows in October. However, at a recent S&amp;P Dow Jones Indices Municipal and Global Bond Forum, various panelists highlighted the relative benefits of municipal bond ETFs,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a new research note.&nbsp;

	&nbsp;

	The $5.5 billion iShares National AMT-Free Muni Bond ETF (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) has added $251.7 million in new assets during the fourth quarter while the a high-yield rival, the $407.3 million SPDR Nuveen S&amp;P High Yield Municipal Bond ETF (NYSE: <a class="ticker" href="/stock/hymb#NYSE">HYMB</a>), has seen fourth-quarter inflows of over $51 million.

	&nbsp;

	MUB allocates a combined 78 percent of its weight to bonds rated either AAA or AA and the ETF&#39;s effective duration is 4.7 years, <a href="http://www.ishares.com/us/products/239766/MUB">according to issuer data</a>. With a yield-to-worst of 5.25 percent, HYMB allocates two-thirds of its weight to municipal bonds rated below Baa or not rated at all.&nbsp;

	&nbsp;

	Data suggest investors are better off with passive municipal bond funds, such as ETFs, than actively managed equivalents. <a href="http://www.benzinga.com/news/15/09/5829832/active-management-mediocrity-continues">http://www.benzinga.com/news/15/09/5829832/active-management-mediocrity-continues</a>

	&nbsp;

	&ldquo;J.R. Rieger, Managing Director of Fixed Income Indices for S&amp;P Dow Jones Indices, highlighted that just one-third of all active national municipal bond funds outperformed the S&amp;P Municipal Bond index in the three-year period ended June 2015. Further, just 16% of those funds that were in the top-quartile of their muni bond peer group in the 12-month period ended March 2013 retained that ranking in the subsequent period,&rdquo; said S&amp;P Capital IQ.

	&nbsp;

	Investors looking for regionally-focused muni bond ETF can consider the $188 million iShares New York AMT-Free Muni Bond ETF (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>). IYF has a 30-day SEC yield of about 1.6 percent and a duration of 4.5 years. Over 81.5 percent of its combined weight goes to bonds rated AAA or AA.

	&nbsp;

	IYF &ldquo;tracks a broad, market value-weighted S&amp;P index that seeks to measure the performance of bonds issued within New York. All the bonds inside NYF have investment-grade credit ratings. However, if you live in New York, the ETF&#39;s 1.7% 30-day SEC might look low relative to the Lipper New York Municipal Debt fund mutual fund peer group&#39;s 2.1%,&rdquo; said S&amp;P Capital IQ.

HYMB

iShares Dow Jones US Financial Sector Index Fund

Treading Carefully With Municipal Bond ETFs

With the majority of large-cap company earnings announcements in the rear view mirror, stocks will open trading on Monday with few immediate catalysts.&nbsp; Nevertheless, the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) is within half a percent of its all-time high and Friday&rsquo;s strength may give the bulls some short-term confidence.

	The week ahead features several important economic data points including retail sales, business inventories, producer price index, and consumer sentiment data.

	Here are the key ETFs to watch for the week of Monday, May 11:

	Market Vectors Retail ETF (NYSE: <a class="ticker" href="/stock/rth#NYSE">RTH</a>)

	April retail sales data will be released on Wednesday and the consensus expectation is for a modest gain of 0.1 percent. The actual results of this consumer-oriented statistic will likely impact RTH, which tracks the 25 largest U.S.-listed retail companies.

	Top holdings in this market cap weighted ETF include Amazon.com, Inc.&nbsp;and Wal-Mart Stores, Inc. So far this year, RTH has gained a healthy 7.03 percent as large consumer discretionary companies like Amazon have muscled prices higher.

	The stage is now set for RTH to gravitate towards new highs if retail sales data comes in above expectations.

	Related Link: <a href="http://www.benzinga.com/general/biotech/15/05/5493860/the-best-and-worst-etfs-of-the-week-amid-biotech-rebound">The Best And Worst ETFs Of The Week Amid Biotech Rebound</a>

	iShares China Large-Cap ETF (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>)

	Over the weekend, China&rsquo;s central bank cut&nbsp;<a href="http://www.reuters.com/article/2015/05/10/us-china-economy-rates-idUSKBN0NV0A320150510">its benchmark lending rate</a> for the third time in six months. The news will likely play a significant role in the trading of FXI this week.

	This ETF tracks China&rsquo;s 50 largest stocks and has over $7.4 billion in total assets. So far this year, FXI has gained over 21 percent despite a modest dip in the first week of May.

	The strong momentum in the Chinese stock market has been a consistent theme all year and this latest fiscal policy move may help sustain those gains.

	iShares National AMT-Free Muni Bond ETF (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>)

	Nearly every corner of the fixed-income market has felt the impact of rising interest rates over the last three weeks as bond prices have fallen. Municipal bonds in particular have appeared to demonstrate lackluster performance with respect to their peers.

	MUB tracks a broad-based basket of 2,700 investment grade municipal income securities across a range of states. This ETF has fallen down to its 200-day moving average and erased all of its gains for the year.

	Despite a modest bounce in other quality areas of the bond market late last week, MUB was unable to garner any convincing momentum and may be showing concerning signs of weakness.

Sector ETFs

Broad U.S. Equity ETFs

Emerging Market ETFs

Previews

Merrill Lynch Retail HOLDRS Trust due 12/31/41

Retail, China And Muni Bond ETFs To Watch This Week

The iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE: <a class="ticker" href="/stock/tlt#NYSE">TLT</a>) hit a new two-year closing high this week, as money continues to flow into low-yielding bond ETFs.

	While the U.S. Treasury trade may be getting very long in the tooth, there is another area within fixed income that may be able to hold up better when interest rates start to increase. The <a href="http://www.benzinga.com/topic/municipal-bonds">municipal bond market</a> offers lower yields than corporate bonds, but carries tax advantages that potentially appeal to those in high tax brackets.

	Two municipal bond ETFs that cover the gamete of the asset class are detailed below.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/bonds/14/11/5000280/why-detroit-wont-open-a-floodgate-of-municipal-bankruptcies">Why Detroit Won&#39;t Open A Floodgate Of Municipal Bankruptcies</a></bzrelatedlink>
<h3>
	Market Vectors High Yield</h3>

	The Market Vectors High Yield Muni. Ind(ETF) (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>) is made up of 779 municipal bonds, with 75 percent being non-investment grade and the other 25 percent considered investment grade bonds. The bonds in the portfolio are distributed across more than 20 states and 11 sectors. California, New York and Texas are the most heavily weighted states while IDR/PCR and healthcare facilities are the most weighted sectors.

	The ETF is up 10 percent year-to-date and 3 percent over the last six months. The 30-day SEC yield is 4.41 percent, however the tax equivalent yield for someone in the highest tax bracket (39.6 percent) is 7.3 percent. The ETF has an expense ratio of 0.35 percent.
<h3>
	iShares S&amp;P Natnl AMT-Free</h3>

	The iShares S&amp;P Natnl AMT-Free Munpl Bd Fd (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) provides investors exposure to more than 2,400 municipal bonds. The bonds are distributed across 44 states and 31 sectors. The top weighted states are California at 22.6 percent, and New York at 20 percent. The top weighted sectors are various purposes at 23.6 percent and transportation at 22.5 percent.

	MUB is up 6 percent year-to-date and up 2 percent over the last six months. The 30-day SEC yield is 1.61 percent and the tax equivalent yield is 2.85 percent. The ETF has an expense ratio of 0.25 percent.

	The reason HYD has a higher yield is due to the fact it has a large exposure to bonds that are rated below investment grade. These bonds are considered higher risk therefore investors demand a higher monthly interest payment.

Don't Overlook Municipal Bonds

Bonds have had a very good 2014 as the 10 year treasury yield decreased from 3.0 percent on January 1 to a current yield of around 2.35 percent.

	Many investors and money managers are now wondering what to do with their bond allocations as 2015 approaches. This is a difficult question with the specter of a rising Fed Funds rate and higher valuations across all asset classes.

	Below are thoughts on some major bond classes, keeping in mind balance risk reduction and maintaining some positive returns over the next 12 months.
<h3>
	Municipal Bonds</h3>

	This has been one of the best performing bond classes this year, with the Ishares National Municipal index fund (NYSE: <a class="ticker" href="/stock/mub#NYSE">MUB</a>) up around 8 percent through October. Longer dated municipals are up more than 13 percent as measured by the Powershares National Muni ETF (NYSE: <a class="ticker" href="/stock/pza#NYSE">PZA</a>). This performance was aided by two components: the lowering of overall interest rates and the compression of favorable yield spreads between municipals and treasuries present at the beginning of the year.

	Because the upside in both those areas could largely be pasr, trimming some exposure to municipal bonds makes sense. Concentrating on allocation in maturities in the 10-15 year range is recommended, as any longer a lot of the additional &quot;juice&quot; could be largely exhausted and much shorter typically provides little yield. Assuming an investor still has a decent amount of stock holdings in their portfolio and has a reasonably high tax rate some exposure still makes sense.
<h3>
	Investment Grade Bonds</h3>

	Investment grade bonds also had a very good 2014 with the iShares Investment Grade fund (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>) up about 7.3 percent on the year. Like municipal bonds, this sector benefited largely from decreasing interest rates through the year. Also, like municipal bonds, trimming exposure here makes sense as there is very little further spread-tightening prospects and interest rates are not foreseen decrease a great deal from here (if anything a slight rise in rates could occur).

	Allocation makes the most sense in the 7-12 maturity range here, as shorter term bonds yield no more than 1-2 percent with some credit risk.
<h3>
	High Yield Bonds</h3>

	&quot;<a href="http://www.benzing.com/topic/high-yield-bonds">Junk bonds</a>&quot; were one of the worst performing bond classes this year, as the decrease in rates were somewhat offset by a widening of credit spreads. This is the one area of the bond market that on a relative basis has a little better valuation this year versus last. A marginal add of exposure here might be a good idea as long as you can take more equity-like risk. Yields of 5.5 percent or so is attainable with bond funds like the iShares High Yield fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) or the SPDR short term high yield fund (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>).
<h3>
	Alternative Ideas For 2015 Allocations</h3>

	There are a few areas of the bond market that look good for an allocation or an add to an existing position over the next 12 months.
<ul>
<li>
		Chinese investment grade bonds: These bonds offer a 3.3 percent yield (roughly the same as American Investment grade bonds), but with less interest rate risk. Now that rates are substantially lower, these less interest rate sensitive bonds offer some appeal, although when buying you are in effect investing in the Chinese currency as well.</li>
<li>
		&lsquo;Barbell Strategy&#39;: While most alternative or unconstrained bond funds carry a higher risk, Doubleline&#39;s Total Return fund (DBLTX) is a standout. They employ a fairly simple strategy of owning low/no duration mortgage bonds with good yields and longer treasuries balancing the former position out in terms of risk. At the same time, the total yield on the strategy is between 4 and 5 percent. In 2013 as interest rates increased substantially the fund did not lose money.</li>
<li>
		&lsquo;Flattening of the yield curve&#39;: It is possible that as the Fed increases short term rates sometime in 2015, while the longer term bond yields remain little changed or only nudge up slightly. This will cause a &lsquo;flattening&#39; of the yield curve. An easy way to play this move is to buy the iPath US Treasury Flattener ETN&nbsp;(NYSE: <a class="ticker" href="/stock/flat#NYSE">FLAT</a>). If the spread between short term yields (likely moving up) and longer term yields decreases, this trade would make money.</li>
</ul>

	Eric Mancini is the Director of Investment Research at<a href="http:// www.tfgllc.com"> Traphagen Financial Group</a>, an independent investment advisory firm located in Northern New Jersey.

DBLTX

DSUM

FLAT

PowerShares Insured Municipal Bond Portfolio

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iShares National Muni Bond ETF

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iShares National Muni Bond ETF (ARCA:MUB), Quote.Headers.trade-ideas