Muni Bond Funds Rake It In For A Ninth Straight Week

Municipal bond mutual funds continued their hot streak. As the market saw modest firming on the week, muni bond funds saw inflows for a ninth consecutive week.

They recorded $365 million of inflows from funds that report their flows weekly for the week ended June 13, according to Lipper FMI.

<p> The numbers fell from those of the previous week. There were net inflows of $593 million the week ended June 6. The market has now seen positive flows for 38 of the past 41 weeks.

Muni bond funds are up $21.8 billion on the year to date through June 13. Over the same period, long-term muni bond funds are up $9.4 billion, while high-yield funds are up $4.5 billion.

The uptick in volume this week arrived with few small concessions. Traders noted that the new issuance was priced well and absorbed.

Tax-exempt yields fell slightly on the intermediate and long ends of the curve; they narrowly outperformed their Treasury cousins. Muni ratios to Treasuries remain cheap, with maturities across the curve all settling above 105% by Thursday’s close.

Investors also have wheelbarrows full of redemption money that will need a home. And they seem largely wary of equities’ performance, of late.

This past week, assets for all funds that report their flows weekly fell to $299.09 billion from $299.21 billion the previous week. It was the first decrease reported since the week ended March 21.

The value of the holdings for weekly reporting funds fell by $481 million. The week before, they rose by $212 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $483 million inflow, down somewhat from a $593 million gain the week before.

Long-term bond funds continued to see hefty inflows, in fact, the bulk of the overall figure for muni bond funds. Long-term bond funds that report their flows weekly saw inflows to the tune of $318 million. That compares with $291 million the week before.

High-yield muni funds posted a strong week. They have seen inflows for 12 consecutive weeks, and 26 of the previous 27 weeks.

Funds that report weekly saw $165 million in inflows, Lipper said. The previous week, high-yield funds reported $182 million in inflows.

Assets for high-yield funds that report their flows weekly increased to $40.65 billion, up from $40.53 billion the previous week.

The value of the holdings for weekly reporting funds decreased by $48.4 million. Last week, they rose by $147.2 million.

The four-week moving average for all high-yield muni bond funds that report their flows weekly was a $163 million inflow, down from a $179 million inflow the week before.