BlackRock, Vanguard Muni ETFs See Record Inflows After Bond Market Volatility
The two largest municipal bond exchange-traded funds (ETFs) — BlackRock's iShares National Muni Bond ETF and Vanguard's Tax-Exempt Bond Index ETF — recorded their highest weekly inflows ever following a recent bond market downturn. The $1.2 billion influx into the BlackRock fund and $1.7 billion in new assets for the Vanguard product reflect growing investor interest amid rising yields that have made municipal bonds more attractive relative to taxable alternatives. Vanguard's head of municipal credit research, Nathan Will, noted that higher muni bond yields are drawing attention from investors seeking tax-efficient returns. Meanwhile, SWBC Investment Services' CIO Chris Brigati suggested the inflows may also be driven by tax-loss harvesting strategies as market volatility offers opportunities to offset gains in other asset classes. Despite a 1.9% decline in year-to-date muni bond performance and rising benchmark yields for both ten- and thirty-year munis, investors are viewing current conditions as an opportunity to add exposure to what is seen as a high-quality, tax-advantaged segment of the fixed income market.
Topics: BlackRock ETF inflows fixed income municipal bonds Vanguard