Monoline Insurer News

Here’s a look at the top dividend yielding municipal bond ETFs right now with an average credit quality of AA or better:

1) Nuveen Dividend Advantage Municipal Fund 2 (AMEX: NXZ) 6.09%, 8.45% (TEY), AA average

2) Eaton Vance Insured Municipal Bond Fund (AMEX: EIM) 6.03%, 8.38% (TEY), AA average

3)  Eaton Vance Insured Municipal Bond Fund II (AMEX: EIV) 5.93%, 8.23% (TEY), AAA average

4) Nuveen Select Quality Municipal Fund (NYSE: NQS) 5.91%, 8.21% (TEY), AA

5) Nuveen Dividend Advantage Municipal Fund 3 (AMEX: NZF) 5.87, 8.15% (TEY), AA

Taking a look at the municipal bond market it appears that there is a still a lot of fear priced into these issues.  Another way to look at this is to see which ETFs are carrying the largest price/NAV discount.  See below.

1) -14.82% Seligman Select (SEL) - largest holdings in AL, CA, NY, NJ, AK

2) -14.67 MBIA/Claymore Managed Duration Investment Grade (MZF) - largest holdings in CA, MO, CO
3) -14.16 Blackrock Florida Insured (MFL)

4) -14.05 Delaware Investments Arizona (VAZ)

5) -13.98 DTF Tax Free Income (DTF) - utilities/public works

6) -13.97 Nuveen New York (NUN) - 100% AAA

7) -13.93 Putnam Municipal Opportunities (PMO) - 20% hospitals

-13.78 Nuveen Florida Investment Quality (NQF) - 80% AAA

9) -13.69 Eaton Vance Michigan - 54% AAA

10) -13.67 Nuveen Florida Quality Income (NUF) - 75% AAA

Take a look at the 1-week return for the monoline insurers and some select municipal bond exchange traded funds (ETFs).

Ambac Financial (NYSE: ABK) +4.01%

MBIA Inc. (NYSE: MBI) +6.49%

Note: Both equity listings for the main monoline insurance companies are up, but faced a rough end of the week.

Muni bond ETFs:

Nuveen Insured Premium Income II (NYSE: NPX) -2.36%

Nuveen Investment Quality Municipal Fund (NYSE: NQM) -0.37%

Lehman Municipal Bond (AMEX: TFI) -3.92%

Blackrock Long Term Municipal Advantage (NYSE: BTA) -6.63%