Muni Bond Fund Flows Still in the Red, at $770M

Municipal bond mutual funds recorded outflows for the 26th straight week, numbers from Lipper FMI showed.

For the week of Nov. 20, $770 million left weekly reporting funds. The numbers compare with outflows of $903 million for the week of Nov. 13.

In addition, weekly reporting long-term and high-yield muni bond funds recorded outflows over the span, as well.

Lipper had reported inflows in an earlier release of numbers for all muni bond mutual funds Thursday afternoon.

Muni yields fell gradually over the week until Wednesday, when the Federal Open Market Committee released minutes from its October meeting stating it could decide to slow its pace of purchases at one of its upcoming meetings if economic conditions merited. Prices subsequently plunged across bond markets.

The week's most noteworthy deal, $1.78 billion of Jefferson County, Ala., sewer warrants which priced Tuesday, found a decent reception in the market following a two-day retail order period.

Muni yields still managed to outperform those of Treasuries, even though they mostly fell on the week. The 10-year triple-A yield rose five basis points on the week to 2.79%. The 30-year triple-A yield increased three basis points to 4.16%. The two-year yield held steady for a sixth consecutive session.

Muni ratios to Treasuries declined past the front end of the yield curve. The 10-year ratio dipped two percentage points over the week to land at 95%.

The 30-year slipped two percentage points, as well, to 107%. The two-year ratio climbed four percentage points over the span to 118%.

Assets for all muni funds that report their flows declined for a third straight week to $271.2 billion. During the previous week they fell to $277.0 billion.

The value of the holdings for weekly reporting funds rose by $400 million. The week before, they decreased by $764 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly was $729 million of outflows, compared with $722 million of outflows the week before.

Long-term muni bond funds that report flows weekly still recorded outflows, at $451 million. They recorded $608 million of outflows the previous week.

Weekly reporting high-yield muni bond mutual funds saw outflows of $92 million for the week ended Nov. 20. The previous week, they reported outflows of $144 million.

Assets for high-yield funds that report their flows weekly slipped for a third straight week to $36.23 billion, from $36.24 billion the week before.

The value of the holdings for high-yield funds increased by $82 million. Last week, they fell by $113 million.

The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $73 million of outflows, versus $67 million of outflows the previous week.

.