A great upsurge in new issuance could not deter investors from allocating money into municipal bond mutual funds.
Muni bond funds saw $534 million of inflows from funds that report their flows weekly for the week ended May 23, according to Lipper FMI.
The numbers dropped from those of last week. There were net inflows of $805 million the week ended May 16. The market has now seen positive flows for 35 out of the past 38 weeks.
The municipal market absorbed the surge in new deals amid modest concessions. Investors still like the technicals they’re seeing in the market. Yields are also ticking up across the curve from near prohibitive lows.
Demand remains robust, as investors will see an industry-estimated $70 billion in redemption cash arriving starting June 1. The money will need a home, low yields or not.
This week, assets for all funds that report their flows weekly inched up to $297.66 billion from $296.68 billion the previous week.
The value of the holdings for weekly reporting funds fell by $55 million. The week before, they plunged by $430 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $672 million inflow, up slightly from a $653 million gain the week before.
High-yield muni funds posted another strong week. They have seen inflows for 23 of the previous 24 weeks.
Funds that report weekly saw $169 million in inflows, Lipper said. The previous week, high-yield funds reported $228 million in inflows.
Assets for high-yield funds that report their flows weekly rose to $40 billion, up a touch from $39.81 billion the previous week.
The value of the holdings for weekly reporting funds increased by $31.1 million. Last week, they fell by $47.3 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $204 million inflow, down somewhat from a $212 million inflow the week before.