One Investor Bets Big on Tiny Muni ETF Despite Market's Losses

(Bloomberg) -- At least one investor has high hopes for the muni bond market.

He or she purchased 650,000 shares of the Hartford Municipal Opportunities ETF worth $25.5 million earlier this week, causing the fund to see a record inflow. A week earlier, an investor bought 450,000 shares worth $17.6 million. That pushed up the fund’s assets to $76.4 million.

It’s notable because until October, the Hartford fund hadn’t attracted any new cash, barring a $2 million inflow shortly after it launched in December 2017. And it’s curious timing for a municipal-bond ETF to suddenly pull in funds: state and local debt has posted a 0.9 percent loss this year as interest rates head higher. Other big municipal-bond ETFs have seen record outflows during the market’s rout this month, which has started to stabilize.

One Investor Bets Big on Tiny Muni ETF Despite Market's Losses

The Hartford Municipal Opportunities ETF is an actively-manged fund that invests in both investment-grade and high-yield municipals and seeks to provide a "long-term total return."

The fund’s effective duration is just over five years and its top revenue bond holdings include transportation and health care credits, according to a June fact sheet. The fund, which was listed by Hartford Funds in late 2017 and is sub-advised by Wellington Management Company, is managed by Timothy Haney and Brad Libby.

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