Municipal bond funds have been on a tear, racking up 48 consecutive weeks of net inflows as of the last week in August (the second-longest run since Lipper began tracking weekly flows in 1992). With equities hitting new highs and related dividend yields on the decline, nervous investors — many of whom may believe the recent equity rally is growing stale — have been flocking to the relative safety and high tax-equivalent yields provided lately by municipal debt.

The question is, will the rally in the asset class continue, or are its winning ways nearing an end?

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