The largest exchange-traded fund tracking U.S. municipal bonds is trading at the steepest discount to its underlying assets this year as localities borrow the most since December.

The $3.6 billion iShares S&P National AMT-Free Municipal Bond Fund traded below its net-asset value for the past four days after pricing at a 0.43 percent discount yesterday, data compiled by Bloomberg show. Some investors see a discount as an opportunity to buy the fund, which typically has traded at a premium since it was created in 2007.

“It’s probably going to maintain the discount into today,” said Bart Mosley, co-president at Trident Municipal Research in New York. Selling of munis may persist into early April, he said.

The ETF, known as MUB, fell about 0.2 percent to $109.65 at 2:31 p.m. in New York, reaching the lowest since July, Bloomberg data show.

That drop reflects a jump in issuance in the $3.7 trillion municipal market, Mosley said. Local governments from California to New York plan to sell $8.9 billion of debt this week, the most since December, Bloomberg data show. That supply spike and investors looking to sell munis to make April 15 tax payments are causing tax-exempt yields to increase, Mosley said.

The Dow Jones Industrial Average is also setting record highs, luring investors.

Yields on top-rated munis due in 30 years climbed about 0.06 percentage point to 3.12 percent at 2 p.m. in New York, the highest since Aug. 22, Bloomberg data show.