3 Muni Bond ETFs Gaining From Continuing Inflows

While the U.S. based stock funds continue to suffer from investor caution, muni bond funds are continuing to attract investor attention. According to recently released Lipper’s data, muni bond funds have registered third best stretch of weekly inflows in history. Also muni bond markets registered longest streak of monthly gains in 24 years, according to a data released by BlackRock. Hence, it will be interesting to find which muni bond ETFs are gaining from this encouraging scenario.

Consistent Inflows in Muni Bond Funds

In a scenario when equity focused funds are witnessing significant outflows, muni bond funds continue to attract investor attention. According to Lipper, the U.S. based muni bond funds registered net inflows of $871 million for the week ending Aug 10, preceded by an inflow of $783.9 million posted a week earlier. The category saw inflows for consecutive 45 weeks, registering its third longest stretch in history.

While these funds attracted a total inflow of $27.9 billion in this winning streak, the four week moving average of net inflow came in at $862.9 million, as per Lipper. The data also showed that muni bond funds that focuses on high yield securities registered net inflow of $287.4 million for the week ending Aug 10, higher than earlier week’s inflow of $267.3 million.

Longest Stretch of Monthly Gains in 24 Years

Separately, BlackRock’s report showed that muni bond markets ended in the green in July, registering monthly gains for 13-strainght months, which was last witnessed in 1992. Moreover, the S&P 500 National Municipal Bond Index currently has yield of 2.6%, in contrast to 1.2% yield of the Barclays U.S. Treasury Index. If one considers muni bonds’ property of providing tax-free return, the yield on the same will be even higher.

Moreover, the Municipal Securities Rulemaking Board recently reported that trading volume of the U.S. municipal bonds jumped to $818.2 billion during the second-quarter of this year, largest volume witnessed in nearly three year. It also represents a 10.4%surge in trade volume from the year-ago period. The report also showed that buying activity rose nearly 8.1% year-on-year to $6.44 billion during the last quarter.

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