Municipal bond mutual funds saw a second straight week of inflows, and a sixth week out of seven.
The week ending Oct. 19 saw $417 million in inflows from muni bond funds that report their flows weekly, according to Lipper FMI.
In the week ending Oct. 12, there were net inflows of almost $84 million for muni bond funds that report their flows weekly, Lipper reported.
Muni yields on the long end, since Sept. 22, have more or less been rising in response to the Federal Open Market Committee’s decision to initiate Operation Twist. The past three weeks have seen a surge in large deals deluge the primary market. The market had issues absorbing some of them initially, but the past couple of weeks have seen generally more positive responses to the new supply, traders said.
Money hemorrhaged from muni bond funds between mid-November 2010 and early June, often by more than $1 billion a week. In the week of Jan. 19, investors in weekly reporting funds yanked more than $4 billion.
Assets for funds that report their flows weekly fell for the third straight week to $329.1 billion from $333.6 billion the previous week.
The value of the holdings for weekly reporting funds rose by almost $1.4 billion. The week before, they plunged by almost $1.9 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $247 million inflow, up from $217 million the week before.
High-yield muni funds also saw their second straight week of inflows, and their sixth in seven weeks.
Funds that report weekly saw inflows of $36 million, Lipper said. The previous week, high-yield funds reported inflows of just $23 million.
Assets for high-yield funds that report their flows weekly fell for a third consecutive week. They ended at $40.88 billion, down slightly from $41.65 billion the previous week.
The value of the holdings for weekly reporting funds rose by $163 million. Last week, they plunged by $256 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a relatively tiny $6.5 million inflow, down from a $27 million inflow the week before.
