Municipal bond mutual funds had another week of strong inflows amid the market’s risk-on trade this past holiday-shortened week.

For the week ended Feb. 22, muni bond funds saw $883 million of inflows from funds that report their flows weekly, according to Lipper FMI. That represented a small drop from the week ending Feb. 15, when there were net inflows of $1.05 billion.

It marks the 12th straight week of positive flows, and the 23rd week out of the past 25.

Though muni yields underperformed those of Treasuries on the intermediate and long ends of the curve this week, traders reported that new issuance was mostly well-received. This showed there was strong demand, particularly with certain state issuers.

Inflows for muni bond funds have been vigorous since September. And the period of heavy municipal outflows continues to fade as the market shows signs of strength.

The industry, though, still remembers the darker days, when money poured 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 third consecutive week to $286.4 billion from $285.9 billion the previous week.

The value of the holdings for weekly reporting funds continues to be rocky. This past week they decreased by $51.4 million. The week before, they had increased by $576 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $702 million inflow, up from a $609 million gain the week before.

High-yield muni funds also continued their hot hand with another week of inflows. They have been positive for 11 of the past 12 weeks.

Funds that report weekly saw inflows of $183 million, Lipper said. The previous week, high-yield funds reported inflows of $205 million.

Assets for high-yield funds that report their flows weekly fell after three straight weeks of increases. They ended at $36.73 billion, down from $36.82 billion the previous week.

The value of the holdings for weekly reporting funds rose by $25.3 million. Last week, they increased by $137 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $182 million inflow, up from a $159 million inflow the week before.

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