Muni Fund Inflows Dip, But Still Robust

Inflows to municipal bond mutual funds slipped this past week, but they remained hearty.

Muni bond funds reported $964 million of inflows from funds that report their flows weekly for the week ended Aug. 15, a small step down from the previous week’s number, according to Lipper FMI. They have seen inflows for 18 consecutive weeks.

There were net inflows of $1.14 billion in the week ended Aug. 8. For perspective, the muni market has now seen positive flows for 47 of the past 50 weeks.

Over the week from last Friday, tax-exempt yields climbed significantly from the belly of the curve on out. The 10-year triple-A rose 11 basis points over the period to 1.87%.

Still, muni yields outperformed those of Treasuries on the week, leaving ratios richer; muni ratios to Treasuries now sit around 100%.

Assets for all muni funds that report their flows weekly rose slightly to $309.5 billion from $309.3 billion the week before.

The value of the holdings for weekly reporting funds plummeted by $757 million. The week before, they plunged by $490 million, dropping for a third straight week.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $854 million inflow, rising from a $823 million gain the week before.

Long-term bond funds once again recorded strong inflows. Their share of overall inflows fell below half of the figure for muni bond funds.

Long-term bond funds that report their flows weekly saw inflows to the tune of $436 million, falling from $632 million the week before.

High-yield muni funds saw solid inflows yet again, though somewhat less than last week. Flows have been positive for 21 consecutive weeks, and 35 of the previous 36 weeks.

High-yield funds that report weekly saw $239 million in inflows, Lipper said. The previous week, they reported $293 million in inflows.

Assets for high-yield funds that report their flows weekly increased to $43.33 billion, up from $43.17 billion the previous week.

The value of the holdings for weekly reporting funds dropped by $80 million. Last week, they decreased by $34 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was $230 million of inflows, down slightly from $242 million the week before.

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