The business of overseeing individually tailored municipal-bond portfolios has continued to grow rapidly, turning those money managers into the biggest holders of state and local government debt, according to JPMorgan Chase & Co.
The assets in so-called separately managed accounts, known as SMAs, swelled by about 7% last year to a total of $1.6 trillion, according to the investment bank, capping a 44% jump since 2017.
The bank said in a research note that such portfolios held roughly 32% of all outstanding municipal bonds by the end of 2025, far eclipsing other traditional buyers like insurance companies, banks and mutual funds.
That expansion of those accounts has allowed the municipal market to buck some of the concentration seen in other segments of the financial industry, since the vast majority of the roughly 4,400 SMAs — or 4,100 of them — oversee less than $500 million, according to the bank.
“This lesser concentration among fund complexes may stem from the personalized nature of this management style, suggesting opportunities for smaller, localized operators,” JPMorgan wrote.
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