Investor confidence in munis shifted into a higher gear as municipal bond mutual funds saw the heaviest week of inflows in almost two years.

In the week ending Jan. 11, muni bond funds saw $1.11 billion of inflows from funds that report their flows weekly, according to Lipper FMI. That’s more than double the amount seen in the week ending Jan. 4, when there were net inflows of $523 million.

It’s the sixth straight week of positive flows, and the 17th out of the past 19. The number is the highest seen since March 2010, when inflows reached $1.13 billion.

And even though municipal issuers still have yet to ramp up the supply chain of new volume, the market appears to be on sound footing. Strong demand for munis on the intermediate and long ends of the curve has pushed yields at the 10- and 30-year levels deep into record territory.

Market participants might even be forgiven for burying memories of the dark days of early 2011, when money flowed with abandon from muni funds between mid-November 2010 and early June, typically by more than $1 billion a week. In the week of Jan. 19, 2011, investors in weekly reporting funds withdrew more than $4 billion.

Assets for funds that report their flows weekly rose to $275.8 billion from $271.8 billion the previous week.

The value of the holdings for weekly reporting funds more than doubled the previous week’s amount, to $2.86 billion. The week before, they increased by $1.30 billion.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $690 million inflow, up from a $527 million gain the week before.

High-yield muni funds had a large boost in inflows, and have been in the black for five of the past six weeks. Funds that report weekly saw inflows of $270 million, Lipper said. The previous week, high-yield funds reported outflows of $17.5 million.

Assets for high-yield funds that report their flows weekly rose for a fourth straight week. They ended at $35.07 billion, up from $34.26 billion the previous week.

The value of the holdings for weekly reporting funds more than doubled to $532.4 million. Last week, they increased by $258.8 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was a positive $85.9 million, up from a $41.1 million inflow the week before.

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