Market Post: Inflows Decline for Third Week

Inflows for all municipal bond funds fell for their third straight week this week.

Inflows declined to $37 million as of October 29, down from $41 million last, according to Lipper FMI.

Assets of all weekly reporting municipal funds dropped to $313.9 billion from $314.0 billion. The four-week moving average dropped to $321.0 million from $370.9 million.

Flows for long-term muni funds were negative, as they reported $12.8 million in outflows. This is an improvement from last week when long-term muni funds showed $86.13 million in outflows.

Long-term municipal mutual fund assets dropped to $165.1 billion from $165.2 billion last week. The four-week moving average for the long-term funds was an inflow of $224 million, down from $257 million last week.

High yield funds recovered reporting inflows totaling $20.8 million following outflows of $49.17 million previously. Assets rose to $47.98 billion from $47.96 billion last week. The four-week moving average fell to $143 million from $180.5 million.

The muni market sold off on Friday morning with yields rising by as much as one basis point for bonds maturing in three to four years, according to Municipal Market Data's triple-A scale. Bonds maturing in five to seven years yields increased by up to two basis points, and from one to three basis points for bonds maturing in eight to 30 years.

Treasuries weakened too with the two-year note's yield growing by three basis points to 0.51% from market close on Thursday. The 10-year's yield jumped by two basis points to 2.34%, and the 30-year's by four basis points to 3.08%

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