10 Best Municipal Bond ETFs Thus Far in 2019

Municipal bonds are a specific corner of the bond market that has its own nuances to be wary of, such as costs and tracking errors. With bond market mavens warning investors of headwinds in the fixed income space like an inverted yield curve, rising rates and BBB debt sliding out of investment-grade, investors need to be keen on where to look for opportunities.

One area is within the municipal bond space, which may have gotten a boost following last November’s midterm elections. In particular, with respect to infrastructure spending—it’s one of the few things, if any, that Democrats and Republicans can agree on, but with the newly-divided Congress, this could fuel municipal bond ETFs.

Still, investors need to be aware of the costs associated with investing in this fixed income space, as well as certain tracking errors that could arise with respect to their prices.

In the video below, inflows of municipals bonds in 2019 have topped $20 billion, the highest in 13 years. Analysts say taxpayers who face higher taxes because of the new cap on state and local tax deductions are pouring into municipal bonds as tax shelters. CNBC’s Frank Roberts reports.

Additionally, per a Forbes report, “According to Morningstar data, tax-free muni bonds saw more than $8.8 billion in net flows in the three months ended March 31, beating U.S. equity funds ($6.2 billion) and international equity funds ($1.3 billion). This tells me that investors were seeking stability as well as a strategy to counteract the changes to the tax code.”

For investors looking for municipal bond options in the exchange-traded fund (ETF) space, here are 10 to consider:

Symbol ETF Name Total Assets ($MM) YTD
MLN VanEck Vectors AMT-Free Long Municipal Index ETF $148.46 4.82%
RVNU Xtrackers Municipal Infrastructure Revenue Bond Fund $63.83 4.36%
FMHI First Trust Municipal High Income ETF $48.71 4.12%
FLMB Franklin Liberty Municipal Bond ETF $8.83 3.96%
PZA Invesco National AMT-Free Municipal Bond ETF $1,805.53 3.86%
TAXF American Century Diversified Municipal Bond ETF $12.80 3.46%
ITM VanEck Vectors AMT-Free Intermediate Municipal Index ETF $1,711.61 3.43%
MUST Columbia Multi-Sector Municipal Income ETF $22.02 3.41%
FMB First Trust Managed Municipal ETF $664.07 3.31%
HMOP Hartford Municipal Opportunities ETF $122.40 3.21%


For more educational information on municipal bonds, check out the Top 5 Municipal Market Insights, which will cover:

  • 2019 municipal market insights from the award-winning team MacKay Municipal Managers
  • Potential opportunities for active management in the municipal space
  • A closer look at a municipal bond asset allocation strategy
  • How financial advisors can incorporate munis into a diversified fixed-income portfolio
  • Advantages of an ETF vehicle in the municipal bond space

For more market trends, visit ETF Trends