2 ETF Options as Muni & Corporate Bonds See Global Appeal

Intercontinental Exchange (ICE) reported record trading volumes for municipal and corporate bonds in the first half of 2025, with corporate bond volume reaching $120 billion (+20% YoY) and municipal bonds hitting $109 billion (+35% YoY). This marks the fourth consecutive year of growth, underscoring robust institutional demand for these fixed income assets due to their attractive yields, strong fundamentals, and role in diversifying portfolios beyond Treasuries.

Analysis

Intercontinental Exchange (ICE) has reported record trading activity in both municipal and corporate bonds for the first half of 2025, signaling robust investor demand for these asset classes. Corporate bond trading volume surged 20% year-over-year to $120 billion, while municipal bond volume saw a more pronounced 35% increase to $109 billion. This marks the fourth consecutive year of volume growth, underscoring a sustained trend driven by the pursuit of yield and strong fundamentals as investors diversify away from U.S. Treasuries. The activity reflects significant interest from institutional and wealth management clients. The article highlights specific, low-cost investment vehicles for accessing these markets: the Vanguard Tax-Exempt Bond ETF (VTEB) offers a 3.79% 30-day SEC yield with tax-exempt benefits, while the Vanguard Total Corporate Bond ETF (VTC) provides a higher 5.06% yield for investors willing to assume greater credit risk. Both funds feature a very low expense ratio of 0.03%, enhancing their attractiveness as core fixed-income holdings.

Key Decisions for Investors

• Given the strong momentum and attractive yields, investors should consider increasing allocations to corporate and municipal bonds to diversify portfolios and enhance income streams.
• For investors in higher tax brackets, the tax-exempt income from municipal bonds, like those in VTEB, offers a compelling after-tax yield proposition with relatively moderate credit risk.
• Investors seeking higher nominal yields can look to investment-grade corporate bonds via vehicles like VTC, but must be cognizant of the higher associated credit risk compared to government or municipal debt.
• The consistent, multi-year volume growth at Intercontinental Exchange reinforces its strong market position, making ICE a stock to monitor for those investing in financial market infrastructure.