Municipal bond ETFs

The fiscal year for municipalities usually begins July 1st. The outstanding amount is about $3T. Many of them may have to default. As for the holders of this debt:

• Households ­ $1 trillion
• Banks ­ $220 billion
• Insurance companies ­ $350 billion
• Mutual funds ­ $500 billion
• Money markets ­ $370 billion
• Broker/dealers own just $40 billion.

Here are some municipal bond ETFs for various timeframes:

Short term

• iShares S&P Short Term AMT-Free National Municipal Bond Fund (SUB)
• Market Vectors-Lehman Brothers AMT-Free Short Municipal Index ETF (SMB)
• PIMCO Short Term Municipal Bond Strategy Fund (SMMU)
• PowerShares VRDO Tax-Free Weekly Portfolio (PVI)
• SPDR Lehman Short-Term Municipal Bond ETF (SHM)
• SPDR S&P VRDO Municipal Bond ETF (VRD)

Intermediate-Term National Municipal Bond ETFs

• Grail McDonnell Intermediate Municipal Bond ETF (GMMB)
• Market Vectors-Lehman Brothers AMT-Free Intermediate Continuous Municipal Index (ITM)
• Market Vectors Pre-Refunded Municipal Index Fund (PRB)
• PIMCO Intermediate Municipal Bond Strategy Fund (MUNI)

Long-Term National Municipal Bond ETFs

• iShares S&P National Municipal Bond Fund (MUB)
• Market Vectors-Lehman Brothers AMT-Free Long Continuous Municipal Index (MLN)
• PowerShares Insured National Municipal Bond Portfolio (PZA)
• PowerShares Build America Bond Portfolio (BAB)
• SPDR Lehman Municipal Bond ETF (TFI)