Investor demand for municipal bond mutual funds remained sluggish for a 25th straight week.
Weekly reporting muni bond funds recorded outflows of $903 million for the week of Nov. 13, Lipper FMI data showed. Outflows climbed from the week of Nov. 6, when investors withdrew $738 million from the market.
Demand flagged on a holiday-shortened week that saw muni yields change little and underperform those of Treasuries. Puerto Rico bonds saw lackluster pricing while Fitch Ratings downgraded Chicago general obligation bonds by three notches.
Tax-exempt yields closed Thursday stronger as the week's largest deals received a solid reception. Treasuries, though, outpaced munis following the comments Federal Reserve chair nominee Janet Yellen made on Thursday during her Senate confirmation hearing regarding accommodative monetary policy.
The week's largest competitive deals arrived on Wednesday to anxious buyers while the secondary remained quiet.
Muni yields on the week from Friday rose as much as three basis points in the intermediate part of the curve; the market softened the most on Tuesday's session. Muni yields underperformed slightly those of Treasuries at the short and long ends of the curve.
The 10-year triple-A yield rose three basis points since last Friday, to 2.61%, Municipal Market Data numbers showed. The 30-year triple-A yield slid two basis points over the span to 4.13%. The two-year slipped one basis point to 0.33%.
Muni ratios to Treasuries rose by up to four percentage points over the week. The 10-year increased three basis points to 97%.
The two-year jumped four percentage points to 114% over the span, while the 30-year ticked up one percentage point to 109%.
Assets for all muni funds that report their flows declined for a second consecutive week to $277.0 billion. During the previous week they fell to $280.2 billion.
The value of the holdings for weekly reporting funds fell by $764 million. The week before, they decreased by $120 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $722 million of outflows, compared with $823 million of outflows the week before.
Those long-term muni bond funds that report flows weekly continued to show most of the losses over the span, with outflows of $608 million. They recorded $450 million of outflows reported the previous week.
Weekly reporting high-yield muni bond mutual funds suffered outflows of $144 million for the week ended Nov. 13. The previous week, they reported outflows of $92 million.
Assets for high-yield funds that report their flows weekly slid for a second straight week to $36.24 billion, from $36.49 billion the week before.
The value of the holdings for high-yield funds decreased by $113 million. Last week, they fell by $26 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $67 million of outflows, versus $72 million of outflows the previous week.
