Muni bond mutual fund flows fell back into the red, entering territory they occupied for most of the spring.

Funds that report their flows weekly recorded outflows for the period ending May 29 at $157 million, Lipper FMI numbers showed. For the week of May 22, by comparison, they reported inflows of $63 million.

On the week from last Friday, the municipal market saw weakening beyond the front end of the yield curve. The triple-A 10-year yield rose 17 basis points over the period to 2.07%.

The 30-year rose 14 basis points from last Friday to 3.22%. The two year held steady at 0.29% for the fifth straight session.

Treasury yields outperformed those of munis beyond the front end of the curve over the period. The benchmark 10-year and 30-year yields each fell three basis points from last Friday to 2.12% and 3.28%, respectively. The two-year rose two basis points over the period to 0.30%.

The results left munis rich to Treasuries across the yield curve, with ratios all hovering around 98%.

Assets for all muni funds that report their flows weekly fell to $326.2 billion.
The previous week they reported $328.3 billion.

The value of the holdings for weekly reporting funds plummeted by $1.98 billion. The week before, they plunged by $294 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly was $59 million of inflows, compared to just $127,000 of inflows the week before.

There continued to be heavy outflows from long-term bond funds that report their flows weekly.

The outflows continued for a 13th straight week, at $304 million. They reported $139 million of outflows last week.

High-yield muni funds also recorded strong outflows.

Those high-yield funds that report flows weekly had $166 million in outflows, Lipper said.

The previous week, they reported $123 million in outflows.

Assets for high-yield funds that report their flows weekly fell to $45.66 billion, from $46.14 billion reported the week before.

The value of the holdings for high-yield funds fell by $310 million. Last week, they increased by $4 million.

The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $76 million of outflows, falling from $53 million of outflows the week before.

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