Markets

Barclays Global Investors plans to launch a family of municipal bond exchange-traded funds designed to behave more like munis themselves by liquidating at maturity.

The primary market should be fairly brisk this week as the new-issue calendar includes two California deals each larger than $1 billion, a handful of Build America Bond issues, short-term notes, variable-rate bonds, and a generous helping of long-term essential service issues.

It appears the wave of cash flooding the industry all year may have finally crested.

The Bond Buyer’s weekly yield indexes were mixed this week, as municipals were little changed following last week’s sell-off, which prompted a number of issuers to pull scheduled refunding deals from this week’s primary.

The assets of tax-exempt money market funds declined by $2.70 billion and settled at $417.89 billion for the week ending Oct. 19, according to the Money Fund Report, a service of iMoneyNet.com.

A little more than a year ago, precisely at the time people were scrambling to protect the value of their municipal bonds, hedging to protect the value of munis became untenable.

Three professors from Willamette University have published a study reaching a surprising conclusion — municipalities do not sell more bonds when federal tax rates go up.

As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced investors.

The sell-off in municipals last week finally stemmed the tide of cash that had flooded municipal bond mutual funds for the better part of a year.