Markets

Last week, investors did something they have not done in well more than a year: withdrew more money from municipal bond mutual funds than they put in.

The jury is still out among investors on how the municipal bond market will respond during the transition phase of the recalibration of tens of thousands of muni credits to a global rating scale by Fitch Ratings and Moody’s Investors Service.

Fitch Ratings lifted its rating on more than 38,000 municipal bond issues yesterday under a systematic overhaul of the way it assigns grades to the credit quality of state and local governments.

A handful of reasonably sized deals will head to market this week while many municipal participants continue to be on hiatus due to religious and spring break holidays.

In another week of hefty outflows from money market funds, investors withdrew $2.74 billion out of their tax-exempt accounts, leaving behind $367.33 billion in total assets for the week ending March 29, according to the Money Fund Report, a service of iMoneyNet.com.

State and local governments pulled in their biggest-ever tax haul in the fourth quarter as they leaned on property tax collections to help recoup shortfalls in other types of revenue.

The Bond Buyer’s weekly yield indexes were mixed this week, as the short end of the municipal yield curve cheapened, but the long end remained unchanged to slightly firmer.

State Street Global Advisors hired Nuveen Investments to manage a suite of five municipal bond exchange-traded funds — plus a series of new funds the company expects to launch in the coming months.

When Build America Bonds hit the market a year ago, Eaton Vance did not have to do much homework before launching its mutual fund devoted to the new product.