Solid reception of the uptick in new issuance prompted a strong week for municipal bond mutual funds.
For the week ended Feb. 15, muni bond funds saw $1.05 billion of inflows from those that report their flows weekly, according to Lipper FMI. That represented a significant increase from the week ending Feb. 8, when there were net inflows of $370 million.
It marks the 11th straight week of positive flows, and the 22nd week out of the past 24.
Muni yields outperformed those of Treasuries across the curve during the past week. For the second straight week, the two-year triple-A muni yield dropped to a record low. Supply picked up, but plenty of investors found bonds that appealed to their yield and credit parameters.
Since September, inflows for muni bond funds have been robust. And the period of heavy municipal outflows is mostly fading into the recesses of history. Many in the industry, though, can remember when money hemorrhaged from muni funds between mid-November 2010 and early June 2011, typically by more than $1 billion a week. At its worst, investors in weekly reporting funds withdrew more than $4 billion in the week of Jan. 19, 2011.
This past week, assets for funds that report their flows weekly rose for the second straight week to $285.9 billion from $284.1 billion the previous week.
The value of the holdings for weekly reporting funds increased by $576 million. The week before, they had decreased by $653 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $609 million inflow, up from a $599 million gain the week before.
High-yield muni funds saw a boost in inflows. They have been positive for 10 of the past 11 weeks.
Funds that report weekly saw inflows of $205 million, Lipper said. The previous week, high-yield funds reported inflows of $155 million.
Assets for high-yield funds that report their flows weekly rose for the 10th time in 11 weeks. They ended at $36.82 billion, up from $36.48 billion the previous week.
The value of the holdings for weekly reporting funds rose by $137 million. Last week, they decreased by $30 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $159 million inflow, down from a $174 million inflow the week before.
