A high-yield municipal-bond fund run by Capital Group saw the biggest inflow of any US-based exchange-traded fund on Friday, with an infusion of $1.54 billion.
The Capital Group Municipal High-Income ETF had $241 million of assets on Thursday. One day later, that had jumped to $1.78 billion, a 639% gain, after the massive influx of cash, the data shows.
The influx was more than seven times the next largest gain among fixed-income ETFs — a $206 million inflow into a roughly $55 billion BlackRock Inc. offering that invests in short-term Treasuries, according to data compiled by Bloomberg. The entire US ETF universe totals about $12 trillion.
The increase was due to the ETF being added to Capital Group’s tax-aware portfolio series and model portfolios, a spokesperson said in an emailed statement.
“We continue to see strong demand for actively managed fixed income ETFs and believe that further integrating them into ETF models will help serve a greater number of advisors,” the spokesperson said.
The Los Angeles-based asset manager expanded its model-portfolio business to exchange-traded funds in March. The strategy — which bundles funds together into ready-made packages for advisers — has boomed in popularity.
Municipal-bond analysts at JPMorgan Chase & Co. flagged the gain in a research note.
“Last Friday, muni ETFs posted significant one-day inflows of $1.6bn, the inflow was largely driven by one ETF fund ($1.5bn) amid an asset allocation shift from equities into long-term municipal bonds,” the strategists led by Peter DeGroot wrote.
Chad Rach manages the junk Capital Group fund, which invests at least 60% of its portfolio in debt rated BBB+ or below. Its top positions include Puerto Rico debt and bonds backed by tobacco-settlement payments.
The big addition comes as junk-rated munis have been having a rough year. The sector is down 1.6% in 2025, while the broader muni market is up roughly 0.1%, Bloomberg index data show.
LSEG Lipper Global Fund Flows reports showed investors pulled $108 million from muni funds during the week ending Wednesday, April 13.
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