After showing mostly inflows over a period of several weeks, municipal bond funds saw the largest outflows since the week of April 20. And this past week’s results — $861 million in outflows — suggested numbers and a pace that harken back to the 29 straight weeks between mid-November and early June when muni funds hemorrhaged money.
What’s more, the withdrawals are up from those of the previous week, according to Lipper FMI. In the week ended July 27, there were net outflows of $129 million for muni bond funds that report their flows weekly, Lipper said.
Investor interest in muni bond funds, which recently had been rebounding, showed signs of flagging. But the industry well remembers how, for more than six months, money left muni bond funds, often by more than $1 billion a week. In the week of Jan. 19, investors in weekly reporting funds yanked more than $4 billion, Lipper reported.
Assets for funds that report their flows weekly rose this week to $331.2 billion from $321.6 billion the previous week. In addition, the value of the holdings for weekly reporting funds jumped by $3.88 billion. The previous week, they reported an increase of just $197 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly witnessed a $125 million outflow, compared to a measly $22 million inflow the week before.
High-yield muni funds appear to be losing their footing — they had seen inflows for the ninth time in 11 weeks, before experiencing accelerating outflows the past two weeks. Funds that report weekly saw outflows of $118 million, Lipper reported. The previous week, high-yield funds reported outflows of $28 million.
In addition, assets for high-yield funds that report their flows weekly climbed to $41.73 billion from $40.28 billion the previous week. The value of the holdings for weekly reporting funds increased $592 million. Last week, they rose by $95 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a paltry $4.65 million inflow, down from a $27.4 million inflow the week before.
