The three intermediate-term, investment-grade municipal bond ETFs all have large tilts toward New York, California and Texas muni debt. The sector breakdowns also include large weights in state, local, transportation and special tax-related municipal bonds.
The municipal bonds market has been steadily strengthening this year, along with the broader fixed-income market. ITM is up 3.91% year-to-date.
SEE MORE: Muni Bond ETFs Are Still a Crowd Favorite
“The muni market continues to be on a very productive ride here,” Colby told ETF Trends in a call.
However, Colby warned that September has historically been a tough month for munis, so a little pullback could be good for long-term consolidation.
Nevertheless, Colby believes that munis remain attractive as “fundamentals on a tax-equivalent basis stacks up on other fixed-income.”
For more information on the muni bonds market, visit our municipal bonds category.