Industry watchers cite election uncertainty as one big factor behind last week’s municipal bond mutual fund outflows, the first reported in more than six months.

Outflows occurred the week ended Oct. 31 despite positive movements in fund market valuations, according to JPMorgan. But the markets’ responses to the presidential elections and the potential makeup of Congress, the coming fiscal cliff and the possible threat to the tax-exempt status for muni bonds all combined to prompt investors to reconsider their allocations, industry watchers said.

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