Investors continued shoveling rare quantities of cash into municipal bond mutual funds last week.

Muni funds that report their figures weekly attracted $1.12 billion in cash from investors during the week ended June 3, according to AMG Data Services.

Investors have stuffed cash into muni funds every week this year, lately at a record pace. A weekly infusion of more than $1 billion in cash was once unusual for the industry. It is now commonplace.

Investors have entrusted at least $1 billion to muni funds for five straight weeks. Before this year, weekly inflows exceeded $1 billion only 10 times, according to AMG data reaching back to the early 1990s.

The data excludes certain fund families that report their figures monthly. For all municipal funds, including the monthly reporters, money is coming in at a rate of $1.78 billion a week, based on a four-week moving average.

While this figure is down slightly from the record $1.83 billion pace last week, it remains far higher than any time in history.

Before this year, the record pace on this basis was $1.37 billion. Before last year, the record was $1.14 billion.

The story the past few months has been a growing eagerness to ferry money out of safe havens and put it to work in riskier investments.

According to EPFR Global, investors last week yanked $22.7 billion from money market funds, which are super-secure parking spots for cash often offering yields below 1%.

The sector has bled $93 billion this year, according to EPFR.

This is reflected in a number of areas. Stocks are up 39% since March 9. The yield on the 10-year Treasury note has spiraled from barely more than 2% to more than 3.8%.

As more money avalanches off the $3.3 trillion mountain of cash in money market funds, EPFR Global said, it is landing in higher-yielding funds.

Last week's money-market outflow was the second-biggest this year, which EPFR Global called a "sign of continuing confidence."

Tax-free money-market funds alone lost $3.36 billion, according to

The fund tracker speculated cash is leaving muni money markets in favor of short-term muni funds, which offer higher yields.

Another way to measure the rate of inflows into municipal funds is examining what percentage of total assets the four-week moving average represents.

The current four-week moving average of inflows is 0.46% of muni funds' $395 billion in total assets. Until the recent influx of cash, this was an almost unprecedented rate of inflows, according to AMG.

March 1993 and August 1992 were the only times muni funds lured a higher percentage of their assets through inflows. Since the early 1990s, inflows have been less than 0.3% of assets nearly 19 times out of 20.

Municipal funds are approaching full recovery - they are just $3 billion shy of the record $397 billion in assets recorded in September.

At the current rate, it will take two or three weeks to recoup the money lost during the fourth quarter of 2008, a period in which investors shuttled $9.42 billion from municipal funds and market losses chewed an additional $42.26 billion from the sector.

So far this year, muni funds have attracted $27.27 billion in cash from investors and recorded $24.94 billion in market gains.

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