The iShares S&P National AMT Free Bond Fund (NYSEArca: MUB) lost close to 1 percent yesterday, which may be because arbitrageurs are trying to close the gap between the ETF’s price and the value of its underlying securities, according to an article on Bloomberg.

Money managers began running out of bonds to buy and began using the municipal market to mimic returns. This resulted in a lack of supply in the municipal market, creating a 2.4 percent gap between the ETF’s price and its net asset value, the Bloomberg report said, citing a market maker.

Illiquidity in the municipal market can raise costs for authorized agents, and increase the price of the ETF, the article said.

For the full story, go to Bloomberg.com.