Core Insights - The fixed income ETF market has seen significant inflows, surpassing $325 billion as of mid-October, indicating strong investor interest [1] - Market uncertainty is prevalent, particularly regarding interest rates, with a high probability of two rate cuts by the Fed before 2026 [2][3] - Municipal bonds (munis) are attracting investors due to their tax-free income and low default rates, making them an appealing option in the current market [4][5] Fixed Income Market Trends - The fixed income ETF market is experiencing record inflows, suggesting a shift in investor preferences [6][7] - Northern Trust's muni funds offer competitive expense ratios, with each fund priced at five basis points, which is significantly lower than the segment average [5] - The concept of "flippening" is introduced, predicting that fixed income ETFs will eventually surpass equity ETFs in assets over the next five to ten years [7] Municipal Bonds - Muni ETFs are benefiting from attractive yields and strong credit fundamentals, with federal tax-free income being a primary draw for investors [3][4] - Northern Trust offers three muni funds that cover the full yield curve, catering to different investment horizons [6] - The low default rates in the muni market further enhance their appeal to investors seeking stable returns [4]