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Muni Funds See Outflows for Fifth Straight Week

AUG 25, 2011 7:37pm ET
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Investors pulled money from municipal bond mutual funds for a fifth consecutive week.

The week ending Aug. 24 saw $148 million in outflows from muni bond funds that report their flows weekly, according to Lipper FMI.

The withdrawals are down from those of the previous week. In the week ended Aug. 17, there were net outflows of $323 million for muni bond funds that report their flows weekly, Lipper reported.

The muni market this week looked for some direction amid wandering Treasuries, low primary issuance, an apathetic Street, and an eye on the Labor Day holiday, but investor interest remains suspect. The industry recalls how money fled muni bond funds between mid-November 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 rose this week to $331.3 billion from $330.4 billion the previous week. This week's increase followed the first decline in seven weeks.

The value of the holdings for weekly reporting funds decreased by $125 million. The previous week, they reported a decrease of $619 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $503 million outflow, compared to a $499 million outflow the week before.

High-yield muni funds have also seen their fifth straight week of outflows after seeing inflows for nine of the previous 11 weeks. But the amount leaving high-yield muni funds is falling.

Funds that report weekly saw outflows of $35 million, Lipper reported. The previous week, high-yield funds reported outflows of $179 million.

Also, assets for high-yield funds that report their flows weekly ended at $41.21 billion, up from $41.01 billion the previous week. The value of the holdings for weekly reporting funds fell by just $20 million. Last week, they fell by $167 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $142.2 million outflow, down from a $140.4 million outflow the week before.

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