"The News is Out" in MuniLand

“The news is out… all over town”

MuniBonds have been rallying.

Investors are catching on.

Value still remains further out on the curve.

Bloomberg Muni Index rallied approximately 2% in August 2025 as investors invested more than $2 billion (net) into MuniBond funds, according to FactSet.

In addition, the Bloomberg Muni Index posted a total return of 2.3% for September bringing year-to-date returns to 2.6% as of September 30, 2025. In fact, since the end of August 2025, it is apparent that individual investors have "gotten the news" and have invested over $7 billion (net) into MuniBond mutual funds.

Total return performance in September was positive across the curve. The biggest outperformers were the long end (4.1%) and 20y (3.9%). At the shorter end of the curve, MuniBonds with 1-year and the 3-year maturities returned only 0.1%.

Remember that in July, I posted that 89% of YTD inflows into MuniBond mutual funds and ETFs have focused on the intermediate and short segments of the yield curve. This is the individual investor and/or the financial advisor investing capital for their clients.

Conversely, over the last year, we have been buying long bonds priced to a 9–10 year call with maturities longer than 20 years because the yield curve has dictated that this is where the value is. (think more yield)

Our clients “win again” (another nod to Hank Williams) as the yield curve has flattened, and our clients have seen their long MuniBonds appreciate as yields have come down approximately 50bps. Remember, when bond prices go up, yields come down.