In a week that very well may have marked the end to five months of rallying for municipal bond yields, muni bond mutual funds still saw strong inflows.
For the week ended March 14, muni bond funds saw $698 million in inflows from funds that report their flows weekly, according to Lipper FMI. That represented a decrease from the week ended March 7, when there were net inflows of $1.20 billion. That makes 15 straight weeks of positive flows that the market has seen, and 26 weeks out of the past 28.
In addition, triple-A yields outperformed Treasuries at the 10-year and 30-year marks. Still, yields for both munis and Treasuries were weaker overall for the third consecutive week as investors bought new issuance at adjusted levels.
Inflows have been strong for about six months. This is not the same picture during this time period in 2011. Then, the industry was still in the thick of a period of heavy outflows from muni bond funds.
And from mid-November 2010 through early June 2011, money left funds usually 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.
For the past week, assets for funds that report their flows weekly fell for the first time in six weeks, ticking down to $287.6 billion from $288.2 billion the previous week.
The value of the holdings for weekly reporting funds fell for the second straight week. This past week they plunged by $851 million. The week before, they had decreased by $990 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $785 million inflow, down from an $873 million gain the week before.
High-yield muni funds had another robust week of inflows. They have been positive for 14 of the past 15 weeks.
Funds that report weekly saw inflows of $185 million, Lipper said. The previous week, high-yield funds reported inflows of $291 million.
Assets for high-yield funds that report their flows weekly rose to $37.72 billion, up from $37.57 billion the previous week.
The value of the holdings for weekly reporting funds fell by $33.08 million. Last week, they fell by $23.09 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $168 million inflow, down slightly from a $172 million inflow the week before.