Schwab Muni ETF Faces Record Outflows Amid Bond Market Selloff
The Schwab Municipal Bond ETF, with assets of about $3.6 billion, is on track for its largest monthly outflow since launching in 2022 due to a broader selloff in the bond market and rising municipal yields. Over $530 million has been withdrawn from the fund so far this month, including a record single-day withdrawal of $360 million last week. Analysts suggest that these outflows may be driven by internal portfolio rebalancing conducted by Schwab itself or other model-portfolio providers who manage ready-made investment strategies for clients. Rising Treasury rates and concerns over inflation have pressured the muni market, with yields reaching multi-year highs in recent weeks due to increased volatility. Schwab's head of municipal strategies noted that rising tax-exempt yields present opportunities for investors but also contribute to portfolio adjustments. Meanwhile, some strategists believe asset reallocation between fixed income and equities is occurring as equity markets show weakness.
Topics: ETF outflows fixed-income selloff municipal bonds Schwab ETF