Municipal bond mutual funds last week continued to command new money at a pace that was still high but not quite as high as earlier this year.
Municipal funds reported $915.7 million in new money from investors during the week ended Nov. 11, according to Lipper FMI.
This was in the top 5% of all weekly inflows since Lipper started keeping track in 1992, but is further evidence that the flow of new cash has slowed lately.
This was the fifth straight time the weekly inflow was less than $1 billion, after 11 straight weeks when it exceeded that amount. These numbers refer to funds that report their figures weekly. Among all funds, include ones that report figures monthly, the average flow has been $1.28 billion a week for the past four weeks.
While high by historical standards, it is not spectacular by the standards of 2009.
Funds have reported $70.91 billion in new money this year, demolishing the record for inflows over any 52-week period. The average bestowal this year is nearly $1.6 billion a week.
Many market participants say the flood of money in 2009 has come in large part from tax-free money market funds.
Money market funds offer ultra-safe, short-term storage for cash. Yields on tax-free money market funds are at a record low 0.04%, according to iMoneyNet.
Investors impatient with such meager yields have withdrawn $82 billion from tax-free money market funds this year, according to the Investment Company Institute. Most of that money is going to longer-term municipal bond funds, Belle Haven Investments wrote in its latest monthly report.
“This trend is likely to continue as even the most patient investor grows bored with earning nothing on cash,” the firm said.
The latest trend for muni bond mutual funds is market losses.
Roiled in part by concerns over credit quality, munis have slipped 5.3% since the beginning of October, based on the The Bond Buyer’s 40-bond municipal bond index.
Municipal bond mutual funds reported $785.8 million in market losses last week, and have posted $10.69 billion in market losses over the past five weeks.