Bond Rout Spurs Record Outflow From $3.6 Billion Schwab Muni ETF

The $3.6 billion Schwab Municipal Bond ETF is facing its largest monthly outflow ever, driven by a fixed-income selloff and rising muni yields. Investors have pulled in over $530 million in September alone, with a record $360 million single-day withdrawal last week. The fund, which holds just over half of its outstanding shares, is on track for its worst month since launching in 2022.

Market analysts suggest the outflows may be a result of model-portfolio rebalancing as investors shift assets between fixed income and equities amid concerns over inflation and rising Treasury rates.