Muni Bond Funds See Return Of Solid Inflows

Municipal bond mutual funds saw heightened demand from investors this past week.

Funds that report their flows weekly recorded solid inflows of $592 million for the week ended Sept. 26, Lipper FMI numbers show. That compared with $256 million in inflows for the week ended Sept. 19.

Inflows have been the norm, of late. For perspective, muni bond funds have seen inflows for 24 straight weeks, and for 53 of the past 56 weeks.

Supply was expected to hold up this week at around $7 billion, despite a midweek holiday. Huge deals from the Port Authority of New York and New Jersey and California paced the new issuance.

Investor demand has held steady, market pros say. This led to modest rally in tax-exempt yields over the week, though they've largely underperformed Treasury yields.

Assets for all muni funds that report their flows weekly rose for a second consecutive to $311.7 billion from $309.8 billion the week before.

The value of the holdings for weekly reporting funds vaulted by $1.34 billion. The week before, they increased by $61.8 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw $482 million of inflows, inching up from a $485 million gain the week before.

Long-term bond funds that report their flows weekly saw sturdy inflows to the tune of , soaring from $17.8 million they reported the week before.

High-yield muni funds saw relatively solid after a rare week of outflows. Flows have been positive for 41 of the previous 44 weeks.

High-yield funds that report weekly saw $135 million in inflows, Lipper said. The previous week, they reported $95 million in outflows.

Assets for high-yield funds that report their flows weekly increased to $42.20 billion, up from $41.84 billion the week before.

The value of the holdings for weekly reporting high-yield funds rose by $218 million. Last week, they increased by $18 million.

The four-week moving average for all high-yield municipal bond funds that report their flows weekly was $69.4 million of inflows, up a tad from $66.8 million the week before.