Summary
- In 2021, inflows to municipal bond funds have been strong (demand has been exceptionally high), outstripping supply.
- By design, high yield municipal bond funds carry larger allocations to credit risk relative to investment-grade municipal bond funds.
- During periods of limited supply and strong inflows, larger municipal bond funds have historically struggled to be discerning when it comes to credit selection.
Seeking Alpha
Oct. 22, 2021