Investors are unloading municipal-bond exchange-traded funds amidst the recent trading turmoil in municipal bonds, the Wall Street Journal reports.

The $2.1 billion iShares S&P National AMT-Free Muni Bond ETF [see profile] reportedly saw its share price decline to $100.40 on Tuesday from more than $105 last week. Also, the $2.1 billion iShares ETF and the $931 million SPDR Nuveen Barclays Capital Municipal Bond ETF [see profile] each reportedly closed some two percent below the value of the bonds they own on Tuesday and more than 2.4 percent below on Monday, according to Morningstar Inc.

"Investors who are finding it hard to trade in the municipal market are turning to ETFs," Matt Tucker, a managing director at BlackRock Inc. [see profile], told the WSJ. He added that while the iShares ETF's value has declined, its trading volume has spiked to the tuneof more than 220,000 shares of iShares S&P National AMT-Free Muni Bond ETF on Tuesday, about twice the fund's regular trading volume.  

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