Advisors should use caution when using non-rated, high-yield municipal bonds because of the considerable risk involved, experts said in a recent webinar.

“High yields is not a do-it-yourself asset class,” Steve Winterstein, head strategist for municipal investing at Wilmington Trust, said during the S&P Dow Jones Indices webinar yesterday.

Panelists said high-yield munis require a high level of expertise and due diligence on the part of anyone recommending them.

“If investment-grade munis get a cold, high-yield munis go to the hospital,” warned John Keller, vice president at State Street Global Advisors.

Non-rated municipal bonds account for 50 percent of the high-yield muni market and 86 percent of the defaults of all municipals, noted Jim Schwartz, Blackrock Funds head of  municipal credit research.

“Non-rated munis tend to be more volatile and less liquid than rated munis. There’s not a lot of price transparency,” he said.

When a municipal bond is not rated, it is usually because the issuer couldn’t get an investment-grade label for the debt, said Tom Metzold, Eaton Vance  Management co-head of municipal investments.