The past week may have been an otherwise lackluster one for the tax-exempt market, but municipal bond mutual funds saw heavy demand in the form of inflows.
Funds that report their flows weekly recorded inflows of $915 million for the week ended Oct. 10, Lipper FMI numbers show. That’s up significantly from the $553 million in inflows for the week ended Oct. 3.
For perspective, muni bond funds have seen inflows for 26 consecutive weeks, as well as 55 of the past 58 weeks.
A holiday-shortened week precipitated moderate activity in the market. Robust issuance in the primary contrasted with mixed activity in the secondary for the week, traders noted.
Treasury yields outperformed on the intermediate and long ends of the curve, leaving muni ratios to them cheaper.
Assets for all muni funds that report their flows weekly rose for a fourth straight week to $314.5 billion from $313.4 billion the week before.
The value of the holdings for weekly reporting funds plunged by $114 million. The week before, they soared by $1.39 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw $579 million of inflows, up from a $555 million gain the week before.
Long-term bond funds that report their flows weekly saw robust inflows to the tune of almost $350 million, a rise from $248 million they reported the week before.
High-yield muni funds reported inflows, continuing their hot hand. Flows have been positive for 43 of the previous 46 weeks.
High-yield funds that report weekly saw $155 million in inflows, Lipper said. The previous week, they reported $109 million in inflows.
Assets for high-yield funds that report their flows weekly increased to $42.76 billion, up from $42. 52 billion the week before.
The value of the holdings for weekly reporting high-yield funds rose by $27.5 million. Last week, they increased by $214 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly was $76 million of inflows, skipping up from $65.4 million the week before.