Muni Managers Launch Record ETFs to Build on $142 Billion Market

Wall Street’s biggest money managers are zeroing in on a $142 billion segment of the municipal-bond market.

There have been 27 muni exchange-traded fund launches this year, marking an annual record as firms like PGIM and Rockefeller Asset Management muscle into the space. That momentum represents a longer-term bet on ETFs that cater to state and local-government debt investors, given it can take years for the products to garner substantive inflows.

“If they’re currently in the mutual fund business, they need to have a presence in the ETF market,” said Patrick Luby, a strategist at CreditSights Inc. The launches ...