Investors fled municipal bond mutual funds this past week. Muni bond funds saw outflows after seven straight weeks of inflows.
The week ending Nov. 30 saw about $297 million in outflows from muni bond funds that report their flows weekly, according to Lipper FMI. In the week ending Nov. 23, there were net inflows of $137 million for muni bond funds that report their flows weekly, Lipper reported.
Primary issuance in the muni market is expected to have jumped this past week following the Thanksgiving break. November had the second strongest month of new issuance in 2011, and the market has absorbed much of it with relatively little impact on yields.
The week's numbers also reflect the recent surge in the equities markets, particularly on Wednesday, rallying investors to jump into the market.
The same investors clearly recall the months when money flooded 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.
Assets for funds that report their flows weekly fell. They ticked down a bit to $265.5 billion from $265.8 billion the previous week. Three weeks ago, 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 recent pronounced plunge in fund assets.
The value of the holdings for weekly reporting funds rose by $54.7 million. The week before, they increased by $702 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $275 million inflow, down from $385 million the week before.
High-yield muni funds saw a second straight week of outflows this past week.
Funds that report weekly saw outflows of $133 million, Lipper said. The previous week, high-yield funds reported outflows of $111 million.
Assets for high-yield funds that report their flows weekly continue to decrease. They ended at $33.22 billion, down from $33.47 billion the previous week.
The value of the holdings for weekly reporting funds fell by $112.8 million. Last week, they increased by $40.5 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $33.2 million outflow, down from a slight $4.8 million inflow the week before.
