“There’s reason to look for a solid ending to the year for the muni market though. Historically, late November and December have been stronger months for munis because issuance lightens up and investors still hunt for yield. And while munis have generally underperformed in 2018, the fundamental credit quality of many issuers has improved,” according to Morningstar.

The strong U.S. economy is helping states and municipalities collect more tax revenue, bolstering the case for municipal bonds and the aforementioned ETFs.

“A strong U.S. economy has boosted the tax revenues of many state and local governments year to date, and that should ease some budget pressure moving forward,” said Morningstar.

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

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