A volatile marketplace and a gloomy economic outlook conspired to drive investors away from municipal bond mutual funds for a third straight week.
The week ending Aug. 10 saw $682 million in outflows from muni bond funds that report their flows weekly, according to Lipper FMI.
The withdrawals are down from those of the previous week. In the week ended Aug. 3, there were net outflows of $861 million for muni bond funds that report their flows weekly, Lipper reported.
Investor interest in muni bond funds is now floundering following a recent rebound. The industry has not forgotten how money fled muni bond funds between mid-November and early June, often by more than $1 billion a week. In the week of Jan. 19, investors in weekly reporting funds pulled more than $4 billion.
Assets for funds that report their flows weekly ticked up this week to $331.3 billion from $331.2 billion the previous week. In addition, the value of the holdings for weekly reporting funds increased by $784 million. The previous week, they reported a rise of $3.88 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly witnessed a $387 million outflow, compared to a $125 million outflow the week before.
High-yield muni funds have also seen their third straight week of outflows — after seeing inflows for nine of the previous 11 weeks. Funds that report weekly saw outflows of $236 million, Lipper reported. The previous week, high-yield funds reported outflows of $118 million.
Also, assets for high-yield funds that report their flows weekly ended at $41.35 billion, down slightly from $41.73 billion the previous week. The value of the holdings for weekly reporting funds fell $144 million. Last week, they rose by $592 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $71.3 million outflow, down from a timid $4.65 million inflow the week before.
