Municipal bond fund inflows declined in the week ending May 15 as gains by high-yield funds slowed.
Overall inflows to funds that report weekly fell to $616.5 million from $943.2 million the week before, according to Lipper FMI.
Inflows to municipal high yield funds continued to boost the industry total for a 19th week, though they declined to $348.3 million from $476.8 million. Investors said slower issuance this year has increased demand for high yield.
"The supply and demand is in favor of high yields, because the high-yield segment of the muni market is so much smaller than the overall muni market," Michael Schroeder, president and chief investment officer at Wasmer, Schroeder & Co., said in an interview. "When you get shortage of supply [you] get a lot of demand and a lot of money flowing into high yield muni funds."
The four week moving average of inflows for all municipal funds rose to $444.4 million from $308.8 million the previous week, while total assets increased to $290 billion from $288.2 billion.
High-yields' four-week moving average grew to $325.75 million from $313.5 million, and the funds' total assets jumped to $428 billion to $421 billion the prior week.
Long-term municipal funds reported inflows of $432.1 million, down from $647 million the week before.
Their four week average rose to $345 million from of $327 million the week ending May 7. Total assets jumped to $157 billion from $155.6 billion the week before.
