At least a dozen prominent municipal bond closed-end funds saw sharp declines to their net asset values late last week, some by as much as 230 basis points, and many by more than 200.

This is not surprising, industry analysts say. Most of the funds are heavily leveraged and are reacting to rising rates. Furthermore, seasonal factors — such as lighter cash flows, heavier supply and lower demand, mixed in with the approaching tax season — go some ways to explain the drop-off.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.