Despite broad price declines in municipal bond ETFs, investors poured significant capital into the sector, particularly into funds offered by Vanguard and BlackRock (iShares). Vanguard, with an AUM market share of 26.40%, led all issuers with $2.445 billion in weekly inflows. iShares, holding the largest market share at 31.84%, closely followed with $1.824 billion in inflows. These two issuers combined captured the vast majority of the channel's net creation activity, indicating a strong investor preference for their offerings even amidst market weakness.
Individual funds also saw substantial inflows. The Vanguard Tax-Exempt Bond ETF (VTEB) attracted the most, with $1.702 billion in net inflows. The iShares National Muni Bond ETF (MUB) followed, drawing $1.347 billion. Another Vanguard fund, the Vanguard Short-Term Tax Exempt Bond ETF (VTES), added $486 million. This trend highlights that large, broadly diversified vehicles from established providers were favored by investors during this period.
Conversely, some funds and issuers experienced outflows. The Schwab Municipal Bond ETF (SCMB) recorded the largest redemptions at -$809 million, which contributed significantly to Schwab's total weekly outflows of -$809 million as an issuer. Other issuers like Dimensional and Columbia saw more modest outflows, -$40 million and -$17 million respectively. This divergence suggests a selective approach by investors, moving away from certain funds while increasing exposure to others.
