Most municipal bond exchange-traded funds in the fourth quarter performed noticeably worse than the indexes they were designed to track. Or, depending on your perspective, they performed noticeably better.

“Tracking error” — the term ETF managers use for the ­magnitude of the mismatch between ETF returns and returns on a target index — was substantial in the fourth quarter as the equity market dumped shares representing ownership of trusts filled with municipal bonds more severely than the market dumped the bonds themselves.

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