Retirement account not allowing munis

For the past two weeks, our ETF newsletter has been heavily invested in municipal bond ETF’s. I’ve received an email from a reader saying that his retirement account does not allow him to trade in muni funds.

I had hoped that, as a replacement, I could find a non-muni ETF that was highly correlated to muni ETF’s. Unfortunately, I have not found such a fund. For example, regular bond funds, such as AGG (iShares Barclays Aggregate Bond Fund), have been basically flat over the last three months, while muni funds have risen substantially.

My only advice then is to keep the portion of the account that would have been invested in a muni ETF in the money market. The downside of this is that the investor misses the gains from these funds. For example, in the past week, our largest gain came  from AFB (AllianceBernstein National Municipal Income Fund).

Related posts:

1. International stocks, Energy, US IPO’s, and munis
2. International consumer discretionary stocks and municipal bonds
3. Reported returns do not account for new investments
4. Health care
5. “Managing my IRA account”