Fixed Income ETFs

Anyone have experience using these? What are the main pros/cons if the alternative was buying individual issues of CDs, munis, treasuries, etc. Also, I know there was some weird anomalies were they traded at a large discount to NAV during the middle of the credit crisis? Can anyone comment?

Main pro is that you get diversification without requiring large position sizes. Also, for individual issues, key portfolio characteristics like duration can change over time as you hold them… if you want to keep your duration (and therefore interest rate risk) more or less constant, you can let the ETF manager do it for you, rather than have to trade in and out yourself. Not sure about the anomolies… people may have been concerned about additional transaction costs from scrambling, and also trying to figure out if the ETF managers were smart enough to stay away from the bad stuff… I’d be interested to hear if anyone else has a better explanation for the discounts to NAV.