Muni Investors With $250,000 to Spend Want Individual Attention
Investors with $250,000 or more to spend on municipal bonds are increasingly seeking opportunities to pick and choose what goes into their portfolios.
They’re flocking to investment vehicles called separately managed accounts that allow them to select individual securities with the help of a professional.
Assets under management for such accounts that invested in municipal bonds stood at $987 billion as of the first quarter, according to a JPMorgan Chase & Co. survey of 74 firms. Mutual funds held about $769.7 billion of municipals as of that period, Federal Reserve data showed.
“It’s certainly been a bright spot for our business,” said Ben Barber, head of the municipal team at Franklin Templeton Fixed Income. Over the last year and a half, muni SMA assets under management at the division have risen by about 50%, he said.
Companies that offer separately managed accounts have lowered the minimum investment required to $250,000 in recent years, making it accessible to more investors. Though they’re still out of reach for most Americans, given that the median household wealth in 2021 was $166,900, according to a June 2023 report by the Census Bureau.
But previously, investors needed to have millions of dollars to get one-on-one help with picking securities for their portfolios.