Cash influxes into municipal bond mutual funds persisted last week - albeit at a slower pace - as state and local government debt continued to gain traction among retail investors.

Investors entrusted $341.7 million to muni funds that report figures weekly during the week ended April 1, according to AMG Data Services. Inflows were $539.8 million the previous week.

This brings the number of consecutive weeks of inflows to a baker's dozen. Muni funds have been cash-flow-positive all year, to the tune of $11.52 billion in inflows among all funds, including those that report figures monthly.

Muni funds suffered a $7.5 billion exodus of cash in the fourth quarter, experiencing 15 consecutive weekly outflows.

Assets at all muni funds have now recovered almost 9% since mid-December, to $366.94 billion. That reflects the inflows and $18.87 billion in market appreciation since Dec. 17, which marked the beginning of a brisk rally among munis.

The yield on triple-A 10-year munis tumbled from more than 4% on Dec. 17 to as low as 2.84% in February.

The yield curve, which reached its steepest level in decades earlier in the year, eased down a bit. The yield on the triple-A 10-year even ducked below the 10-year Treasury yield for a few days in February.

The 10-year triple-A yield began the rally at 186.1% of the 10-year Treasury.

Munis subsequently sold off a bit, and were bolstered again when the Federal Reserve pledged to buy $300 billion in Treasuries to help keep interest rates low. That has dragged the yield on the 10-year triple-A curve to 3.16%, from 3.45% on March 17, the day before that announcement.

Investors continue to flock to munis. Rates on other conservative investments remain low. The 10-year Treasury, for example, yields 2.86%.

The rate on a one-year bank certificate of deposit is lower than that, according to Bankrate.com, and many money-market funds yield less than 1%.

Flows into high-yield municipal funds turned negative last week for the first time since the week ending Jan. 7.

Before that, high-yield funds were a major source of outflows for the industry, reporting outflows of more than $4 billion from the beginning of September through early January.

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