Investors are still confident about tax-exempts, but less so than in previous weeks. Still, municipal bond mutual funds saw a fourth straight week of inflows, and a eighth week out of nine.
The week ending Nov. 2 saw $141 million in inflows from muni bond funds that report their flows weekly, according to Lipper FMI.
In the week ending Oct. 26, there were net inflows of $310 million for muni bond funds that report their flows weekly, Lipper reported.
Prior to this past week, muni yields on the intermediate and long end have mostly risen since Sept. 22 in response to the Federal Open Market Committee’s decision to initiate Operation Twist. For more than a month, a surge in large deals inundated the primary market. The market had issues absorbing some of them initially, but has received the new supply well the past several weeks, industry pros said.
But investors well remember how money poured 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.
After falling for three straight weeks, assets for funds that report their flows weekly rose to $332.1 billion from $329.7 billion the previous week.
The value of the holdings for weekly reporting funds rose by $1.54 billion. The week before, they increased by $893 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $238 million inflow, up from $174 million the week before.
High-yield muni funds saw inflows this past week following one week of outflows, as well as inflows in seven of the past nine weeks.
Funds that report weekly saw inflows of just $19 million, Lipper said. The previous week, high-yield funds reported outflows of $66 million.
Assets for high-yield funds that report their flows weekly, after falling for three consecutive weeks, rose. They ended at $41.19 billion, up slightly from $40.94 billion the previous week.
The value of the holdings for weekly reporting funds rose by $223 million. Last week, they increased by $140 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a relatively tiny $3.1 million inflow, up from a $19.2 million outflow the week before.