NEW YORK - The struggling U.S. economy continues to drive investors from municipal bond mutual funds.
The week ending Aug. 17 saw $323 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. 10, there were net outflows of $682 million for muni bond funds that report their flows weekly, Lipper reported.
Even though muni ratios to Treasuries are extremely attractive, investor interest in muni bond funds has been on the wane over the past four weeks. The industry remembers 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 fell this week to $330.4 billion from $331.3 billion the previous week. It was the first decline in seven weeks.
The value of the holdings for weekly reporting funds decreased by $619 million. The previous week, they reported a rise of $784 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $499 million outflow, compared to a $387 million outflow the week before.
High-yield muni funds have also seen their fourth straight week of outflows — after seeing inflows for nine of the previous 11 weeks. Funds that report weekly saw outflows of $179 million, Lipper reported. The previous week, high-yield funds reported outflows of $236 million.
Also, assets for high-yield funds that report their flows weekly ended at $41.01 billion, down from $41.35 billion the previous week. The value of the holdings for weekly reporting funds fell $167 million. Last week, they fell by $144 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $140.4 million outflow, down from a $71.3 million outflow the week before.
