High-Yield Muni ETFs See Record Inflows as Short-Duration Funds Lead Performance

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Overview The Fixed Income – Municipal ETF category, comprising 108 funds from 40 issuers with a total of $153 billion in assets under management (AUM), experienced a significant week. The category was marked by substantial inflows totaling over $2.4 billion, largely driven by a massive investment into a single high-yield fund. On the performance side, shorter-duration funds delivered the strongest returns in a relatively flat week for the broader municipal bond market.

Performance Overall performance for municipal bond ETFs was mixed but generally positive. Short-duration funds were the top performers, posting an average week-to-date (WTD) return of 0.08%. Intermediate-duration funds, which represent the largest segment by AUM, followed with a 0.07% gain. High-yield and single-state municipal ETFs both saw modest gains of 0.04%. In contrast, long-duration funds were the only category to finish in the red, declining by an average of 0.01%.

Flows The category saw total net inflows of $2.41 billion for the week. The high-yield municipal category was the standout, attracting a staggering $1.85 billion in new assets. Intermediate-duration funds also saw healthy inflows of $379 million. The largest individual fund flows highlight the concentration of this week’s activity.

  • Top 5 ETF Inflows (5-Day):
    • Capital Group Municipal High-Income ETF (CGHM): +$1,833M
    • Capital Group Municipal Income ETF (CGMU): +$201M
    • Vanguard Tax-Exempt Bond ETF (VTEB): +$147M
    • Schwab Municipal Bond ETF (SCMB): +$68M
    • Invesco California AMT-Free Municipal Bond ETF (PWZ): +$48M
  • Bottom 5 ETF Outflows (5-Day):
    • iShares National Muni Bond ETF (MUB): -$187M
    • iShares California Muni Bond ETF (CMF): -$22M
    • SPDR Nuveen ICE Municipal Bond ETF (TFI): -$18M
    • VanEck CEF Muni Income ETF (XMPT): -$6M
    • Franklin Municipal Green Bond ETF (FLMB): -$3M

Issuer League Tables The top three issuers by AUM remain iShares ($56.7B), Vanguard ($42.0B), and SPDR ($9.3B), who collectively manage over 70% of the category’s assets. However, weekly flow activity told a different story, with Capital Group dominating inflows.

  • Top 3 Issuers by Flows (5-Day):
    1. Capital Group: +$2,061M
    2. Vanguard: +$231M
    3. Schwab: +$68M
  • Bottom 3 Issuers by Flows (5-Day):
    1. iShares: -$174M
    2. SPDR: -$18M
    3. Hartford: -$5M

To see the full data, please refer to ETF Action’s Fixed Income – Municipal report center.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.

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