Investment strategies

Investor demands and lower account minimums have grown separately managed accounts across fixed-income markets, particularly in munis. Russell Feldman, CEO and co-founder of IMTC, discusses this evolution and how technology has contributed to changing market dynamics.

What do investors want for their investment strategies, a look at the various demand components in the market, as well as the uptick of alternative financing products issuers are using and what they mean for the buy-side community.

Some participants on the Street estimate that SMAs hold as much as $1.5 trillion of munis while others peg it closer to $1 trillion to $1.3 trillion.

The inflows into muni mutual funds mark a reversal from 2022 and 2023.

"BNP Paribas choosing Miami to open its newest office reinforces our community's status as a top financial market within the global economy," said Miami-Dade County Mayor Daniella Levine Cava.

"We're in a market right now where there's heightened volatility in prices, inconsistent pace of supply, and for investors who need to put money to work, muni ETFs continued to play that role," CreditSights' Pat Luby said.

Household and U.S. bank ownership of individual bonds fell and the total face amount of munis outstanding was down 0.6% quarter-over-quarter and down 1.4% year-over-year, Fed data shows.

The value of the municipal bond market decreased by 4.3% in the third quarter of 2022, said Pat Luby, a strategist at CreditSights.

Retail investors may be moving out of municipal bond mutual funds and into separately managed accounts, largely due to the headline shock of the massive outflows from the funds, participants say.