Investment strategies

This acquisition provides ICE's platform with more influence over the fixed-income marketplace.

Market Intelligence analyst Jeff Lipton breaks down why munis became the fixed-income standout in 1H 2026, as tax-exempt income, SMA demand, healthy supply-demand dynamics, curve positioning, active security selection and spread compression offset geopolitical volatility and shifting Fed expectations.

Figuring out a way to account for the shift in market demographics is crucial to the long-term future of the muni market, but it doesn't appear to be a priority.

Issuance is on pace for another year of record supply even as factors driving credit spreads change, Center for Municipal Finance Director Justin Marlowe said.

While technology has lowered entry minimums, making it more accessible to all types of investors, the client base for SMAs primarily consists of high-net-worth individuals.

Market Intelligence analyst Jeff Lipton explains why energy prepays have become a popular SMA allocation for yield and diversification, while warning that financial institution counterparty concerns and "guilt-by-association" bank headlines can still trigger episodic spread widening.

As SMAs have garnered attention, they shifted demand further down the yield curve into one- to five- or one- to 10-year area, though SMAs go out 15 or 20 years.

The average muni bond trade size fell below $204,000 in the first quarter, down 5% from 2025, according to Municipal Securities Rulemaking Board data.

With customization, asset managers and advisors can better align portfolios with clients' needs.

The prepaid gas sector, once a small niche sector in the muni market, has grown exponentially over the years, with issuance reaching a record $31.4 billion in 2025.

Loren McDougall will help Birch Creek launch high-yield-focused separately managed accounts.

Separately managed accounts have exploded in the muni market in recent years but high-yield SMAs remain rare.

The slowdown of growth in the fourth quarter does not imply there is dwindling demand for munis, said Pat Luby, head of municipal strategy at CreditSights.

Investors like the 10-year area of the curve because "if they're buying duration, the tax-exempt market is usually going to be one of the best places to buy," said Wesly Pate, a senior portfolio manager at Income Research + Management.

Investors added $238.5 million to municipal bond mutual funds in the week ending Wednesday, following $1.124 billion of inflows the prior week, according to LSEG Lipper data.

"Our job is to take that volatility, figure out what's noise, figure out what's reality, and lean into the opportunities as we see them," said Alex Petrone, director of fixed income at Rockefeller Asset Management.

There are eight municipal bond interval funds, three of which launched last year, promising fewer liquidity constraints and the potential for higher returns.

Kim Olsan, senior fixed-income portfolio manager at NewSquare Capital, discusses the municipal market's performance, the impact of rising yields and inflation, and the evolving role of ETFs and separately managed accounts as the market braces for record supply in 2025.

The face amount of munis outstanding rose to $4.171 trillion, a 0.8% increase from Q2 2024 and 2.9% from Q3 2023, according to the latest Fed data.

Principal Street Partners will acquire the bankrupt firm that specialized in high-yield bonds issued for senior living facilities and charter schools.