The municipal bond market is huge, fragmented and full of quirks, which is exactly why active management can matter, especially in the intermediate part of the curve where many investors build their core tax free income. With roughly fifty thousand issuers, passive funds must sample rather than replicate, and market value weighting can pile money into the largest borrowers. Active managers can steer around concentrated issuers, favor revenue bonds over general obligation bonds, reach for higher income where research supports it and adjust duration quickly when rate expectations shift. Holding some cash lets them buy when dislocations hit. The track record is encouraging, with the average active manager beating the average passive peer in most periods studied, often with less volatility. Active costs more and is never guaranteed, but in a market this uneven, judgment can be worth paying for. 

Finsum: Intermediate muni investors may get more for their fees from a manager who chooses what to own than from an index that owns it all.