Muni Bond Funds See Fifth Straight Week of Inflows

Muni bond mutual funds continued their hot hand for a fifth straight week.

In the week ending Jan. 4, municipal bond funds saw $523 million of inflows from funds that report their flows weekly, according to Lipper FMI. In the week ending Dec. 28 there were net inflows of almost $362 million.

Muni issuers have yet to ramp up the supply chain of new volume but bonds saw active trading throughout the week, with yields mostly dropping on Thursday. The market appears poised to see a strong January as far as investor demand goes, muni pros have said.

Still, those same market participants remember the dark days of early 2011, when money cascaded from muni funds between mid-November 2010 and early June, typically by more than $1 billion a week. In the week of Jan. 19, 2011, investors in weekly reporting funds withdrew more than $4 billion.

Assets for funds that report their flows weekly rose somewhat to $271.8 billion from $270 billion the previous week.

The value of the holdings for weekly reporting funds surged by more than $570 million more than the previous week’s amount, to $1.30 billion. The week before, they increased by $727 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $527 million inflow, down from a $656 million gain the week before.

High-yield muni funds had a down week after four straight weeks in the black. Funds that report weekly saw outflows of $17.5 million, Lipper said. The previous week, high-yield funds reported inflows of $19.0 million.

Assets for high-yield funds that report their flows weekly rose for a third straight week after three weeks of decreases. They ended at $34.26 billion, up from $34.02 billion the previous week.

The value of the holdings for weekly reporting funds rose by $258.8 million. Last week, they increased by $142.2 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $41.1 million inflow, down from a $59.6 million inflow the week before.

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