Market gains and new money from investors continued to push municipal bond mutual funds’ assets to records last week.

Municipal funds that report their money flows on a weekly basis recorded an influx of $653.2 million in new money from investors during the seven-day period ended July 28, according to Lipper FMI.

It was the fourth consecutive week of inflows exceeding $600 million.

The four-week moving average of inflows for all funds, including those that report their figures monthly, is $677.7 million.

Funds have reported $22 billion in new money from investors this year, according to Lipper, and have reported weekly outflows only three times in 30 weeks.

“It’s good to see that the money is flowing into the mutual funds,” said Ron Schwartz, who manages two tax-exempt mutual funds with $1.2 billion in assets for RidgeWorth Investments. “We’re seeing retail interest. People are realizing, with more and more talk about taxes, that eventually taxes are going to go up higher.”

The value of municipal funds’ holdings continues to climb as yields remain at record lows.

Funds reported $687.1 million in market gains last week, and have reported more than $5 billion in gains since mid-June.

Municipal bonds have delivered returns of 4.8% this year, according to the S&P National AMT-Free Municipal Bond Index, with bond values up about 2%.

The $22 billion in new money and $17 billion in market gains have pushed the muni fund industry’s assets to $505 billion.

This is the seventh consecutive week municipal funds have broken the record for assets. The sector has grown 8.7% this year, after growing 36% in 2009.

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