Investing in municipal bonds is difficult because the market is vast in size and complex, with a fragmented trading system making it difficult to navigate – for example, there are 50,000 issuers for municipal securities, compared to 6,000 for corporate securities.¹

The proportion of municipal bonds rated AAA has fallen sharply since 2007–from 69% to just 17% in 2025. That dramatic shift underscores the need for the in-depth research from professional managers covering every level of the market.²

For many issuers, obtaining a credit rating is not cost effective. Comprehensive credit research is critical to achieve a thorough understanding of non-rated market participants.

When the municipal bond yield curve is steep, it presents opportunities for active managers to add value by exploiting differences in relative value and yields across various bond maturities.

While municipal bond indexes (and the index ETFs that track them) provide broad exposure to the muni market, they do not offer full market coverage. Key segments, representing roughly 1/3 of the investible muni market, are often excluded from the underlying indexes.³