One factor driving muni volatility this year: Asset managers’ rising share of the $4 trillion market once dominated buying and holding for individual investors.
The share of outstanding municipal bonds held by American households fell from 46% in 2020 to 40% in the first three months of the year, according to a Municipal Securities Rulemaking Board report released on Wednesday. The board, a self-regulatory body that oversees muni markets, analyzed Federal Reserve data and determined that the market was shifting from direct ownership of bonds to investments through funds.