Investing municipal bonds backed by sales tax revenues in major metros exhibit strong debt service coverage ratios above 2.5x, which analysts cite as a key factor in maintaining AAA credit outlooks. Even after the rally, the municipal bond curve remains historically steep. Investors can still earn significantly more income by moving into longer maturities, especially in high-quality bonds. Past performance is no guarantee or a reliable indicator of future results. The first table shows average active managers’ minus the average passive managers’ returns net of fees over the 1-,3-,5-,7-, and 10-year time frames. The second table shows the average standard deviation of active returns minus the average standard deviation of the passive returns across the same time periods, with a negative number indicating lower volatility for active. The active manager group consists of all actively managed mutual funds and exchange-traded funds (ETFs) in the following Morningstar categories: US Fund Muni National Short, US Fund Muni National Intermediate, US Fund Muni National Long, and US Fund High Yield Muni. Similarly, the passive manager group consists of all passively managed mutual funds and ETFs in the following Morningstar categories: US Fund Muni National Short, US Fund Muni National Intermediate, US Fund Muni National Long, and US Fund High Yield Muni. Passive funds are those that Bloomberg identifies as index funds that seek to replicate the returns of the index. Active funds are those that Bloomberg identifies as employing some form of active management. Morningstar is an independent provider of fund data. The fund data used in this analysis were obtained from Morningstar Direct, a database containing comprehensive information about mutual funds and other investment products, including performance, holdings, analytics, and investment characteristics. Additionally, Bloomberg is an independent data provider that was used in this analysis to identify whether a fund is actively managed or passive (index fund). A passive fund aims to mirror the performance of a target index. Actively managed funds strive to generate differentiated returns relative to their benchmark by making purposeful investment decisions. Source: Morningstar, Bloomberg Finance L.P. Analysis by T. Rowe Price. See Additional Disclosures. Shorter maturities currently yield 2.80%, offering competitive post-tax returns.