The retail investor is by far the largest holder of U.S. municipal bonds. Retail market perception is easily influenced by the direction of rates and credit headlines and any threats to their fund share net asset values. Adverse investor reaction to market events can tip the demand/supply balance thereby threatening liquidity and the ability to transact. Recently, the municipal bond market has experienced outflows from mutual funds after a protracted period of inflows. Several factors are probably contributing to the recent outflow trend including increases in interest rates and credit headlines about Puerto Rico. Rates have risen during the course of 2015 and market volatility has picked up driven by investor concern over the timing and extent of Federal Reserve rate hikes. Puerto Rico has been headlined due to the Island’s economic, fiscal and pension challenges and the ability of the Commonwealth to remain solvent.