"We saw larger discounts a few weeks ago as the market price got as much as 3% away from underlying net asset value calculation," he said.
"Someone's going to default, and there's going to be article about it; and that's only going to increase the volatility of the ETFs."
Standard & Poor's credit analyst Gabriel Petek noted in a report the potential for greater volatility in municipal bond prices in 2011. "We believe that notable rating downgrades, specific instances of severe fiscal problems and a generally softer environment for municipal credit could occur."
However, the analyst expects that the majority of state and local government bond issuers rated by S&P will maintain medium to high investment grade ratings. In the report, the analyst noted that the S&P/Investortools Municipal Bond Index, which includes $1.27 trillion of municipal debt outstanding, saw newly defaulted bonds of $2.65 billion, or 0.21% of the index in 2010."This is actually somewhat of a decline compared with 2009," where there was $2.9 billion of new defaults." >>Search for Highest Dividends by Rate or Yield
|More on Earnings Today's Top Earnings|
>To contact the writer of this article, click here: Andrea Tse. >To follow the writer on Twitter, go to Andrea Tse. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV