Investors put municipal bond mutual fund flows back in the black this past week. High-yield muni funds continued their strong performance.

There were net inflows in the week ended June 22 of $137 million for muni bond funds that report their flows weekly, according to Lipper FMI. Investors the previous week withdrew $172 million from muni funds. That followed a week of deposits that ended a 29-week trend of outflows.

Assets for funds that report their flows weekly climbed more than $1 billion this week to $318.8 billion from $317.4 billion the previous week. The value of the holdings for weekly reporting funds jumped up $1.2 billion. The previous week, they reported an increase of just $64 million.

For all municipal bond mutual funds that report their flows weekly, the four-week moving average was $49 million in outflows compared to $157.3 million in outflows the week before.

Investors swarmed to muni bond funds in 2009 and most of 2010. But flows reversed in November, Lipper numbers show.

Negative headlines associated with the municipal market, including predictions of bond defaults, frightened investors. For the week ended Jan. 19, investors in funds that report their flows weekly pulled more than $4 billion, Lipper reported.

High-yield muni funds that report weekly saw inflows of about $101 million in the most recent week, Lipper reported. The previous week, high-yield funds reported inflows of $38.6 million. High-yield bond funds have reported inflows six out of the past seven weeks, Lipper numbers show.

In addition, assets for high-yield funds that report their flows weekly increased to $39.59 billion from $39.24 billion the previous week. The value of the holdings for weekly reporting funds powered upward by $257 million, the highest number in five weeks. Last week, they jumped by just $39 million.

For all high-yield muni bond funds that report their flows weekly, the four-week moving average rose to a $44.1 million inflow from a $22.6 million inflow the week before.

The Investment Company Institute's most recent numbers showed muni bond funds seeing inflows for the week ended June 15, but at a slower pace. Muni funds had estimated inflows of $75 million, ICI numbers showed. That compares to the $298 million they saw the previous week.

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