Municipal bond mutual fund inflows fell somewhat from last week’s tremendous infusion, but they were still strongly in the black. Muni bond funds saw a sixth straight week of inflows, and a 10th week of them out of 11.
The week ending Nov. 16 saw about $500 million in inflows from muni bond funds that report their flows weekly, according to Lipper FMI. In the week ending Nov. 9, there were net inflows of $761 million for muni bond funds that report their flows weekly, Lipper reported.
The muni market has seen what many in the industry suspect is a calendar-year high in new issuance this week, following several weeks of strong upsurges in supply. And the market has absorbed the bumper crop of supply with relatively little impact to yields.
The week’s numbers also reflect the recent announcement by Jefferson County, Ala., when it filed the largest municipal bankruptcy in U.S. history. Despite the news, investors were encouraged to keep pouring money into muni bond funds.
The same investors clearly remember how money flowed from muni bond funds between mid-November 2010 and early June, often by more than $1 billion a week. In the week of Jan. 19, investors in weekly reporting funds withdrew more than $4 billion. But few market pros expected the news from Jefferson County to prompt another such panic.
Assets for funds that report their flows weekly fell precipitously. They plunged to $264.9 billion from $332.7 billion the previous week. As of this week, a large asset manager that had been supplying weekly numbers no longer is going forward, Lipper reported. That is strongly believed to account for much of the drop.
The value of the holdings for weekly reporting funds fell by $841 million. The week before, they decreased by $49.3 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $428 million inflow, up from $407 million the week before.
High-yield muni funds saw a third straight week of inflows this past week, as well as inflows in nine of the past 11 weeks.
Funds that report weekly saw inflows of just $48.6 million, Lipper said. The previous week, high-yield funds reported inflows of $61.8 million.
Assets for high-yield funds that report their flows weekly plunged for the same reason listed above: a large asset manager that had been supplying these figures no longer will. They ended at $33.54 billion, down significantly from $41.21 billion the previous week.
The value of the holdings for weekly reporting funds fell by $154.5 million. Last week, they decreased by $44 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a relatively tiny $15.9 million inflow, up slightly from a $12.7 million inflow the week before.