Additionally, Citi Research head of municipal bond strategy Vikram Rai pointed out that we are also seeing increased demand among foreign investors as yields on international government debt have gotten so low that overseas investors see a yield advantage in U.S. munis, even if they don’t benefit from the tax advantages, reports Amey Stone for Barron’s.

“Our recent conversations with overseas clients indicate that foreign demand for municipals is on the rise, and this view is also supported by the recent Fed flow of funds data, which show that as of Q1 2016, foreign investors have added $6.7 billion to their municipal holdings over the last year and $2.0 billion over the last quarter. At present, foreign investors account for 2.4% of all municipal holdings,” Rai said.

Related: Manage Volatility, Generate Income with Muni Bond ETFs

With rising domestic and foreign demand for U.S. munis, Rai sees strengthening fundamentals will continue to support the municipal bond market ahead.

“As a result, we believe that technicals will be supportive for municipals, not just in June but through the rest of the summer as well,” Rai added.

For more information on the munis market, visit our municipal bonds category.

iShares National AMT-Free Muni Bond ETF