Additionally, more investors have been piling into munis since the recent selling. According to Lipper US Fund Flows data, muni mutual funds have attracted $1.3 billion in assets over March. So far this month, MUB saw $142.9 million in inflows, TFI added $26.5 million and ITM brought in $35.3 million, according to ETF.com.
However, municipal bond are currently underperforming Treasuries this year. Year-to-date, MUB rose 0.6%, TFI gained 0.5% and ITM increased 0.8%, whereas IEF returned 1.9%. Dan Heckman, a fixed-income strategist at U.S. Bank Wealth Management, argues that the rising supply of new munis issuance due to the low borrowing costs has contributed the slight underperformance.
iShares National AMT-Free Muni Bond ETF
For more information on the munis market, visit our municipal bonds category.
Max Chen contributed to this article.