The municipal market may have had a lackluster week, marked by rising yields and modest activity in the primary and secondary.
But investors poured into muni bond mutual funds at a rate not seen since the week ended March 7.
Muni bond funds reported $1.14 billion of inflows from funds that report their flows weekly for the week ended Aug. 8, more than doubling the previous week’s number, according to Lipper FMI. They have seen inflows for 17 consecutive weeks.
There were net inflows of $504 million in the week ended Aug. 1. For context, the muni market has now seen positive flows for 46 of the past 49 weeks.
For the year to date through July 25, there have been $26.6 billion in inflows.
Muni yields rose up to seven basis points from the belly of the curve on out over the week from last Friday. The 10-year triple-A rose six basis points over the period to 1.70%.
Muni yields outperformed those of Treasuries on the week, leaving ratios richer. Muni ratios to Treasuries still sit above 100%.
Assets for all muni funds that report their flows weekly rose to $309.3 billion from $308.6 billion the week before. In two months, they have risen $10 billion.
The value of the holdings for weekly reporting funds plunged by $490 million. The week before, they increased by $397 million, falling for a second straight week.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $823 million inflow, rising from a $701 million gain the week before.
Long-term bond funds continued to see robust flows. They remain more than half of the overall figure for muni bond funds.
Long-term bond funds that report their flows weekly saw inflows to the tune of $632 million, rising from $307 million the week before.
High-yield muni funds saw strong inflows yet again. Flows have been positive for 20 consecutive weeks, and 34 of the previous 35 weeks.
High-yield funds that report weekly saw $293 million in inflows, Lipper said. The previous week, they reported $130 million in inflows.
Assets for high-yield funds that report their flows weekly increased to $43.17 billion, up from $42.91 billion the previous week.
The value of the holdings for weekly reporting funds fell by $34 million. Last week, they increased by $159 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was $242 million of inflows, up somewhat from $212 million the week before.