Money Flows into Muni Bond Funds for First Time Since May

Municipal bond mutual funds recorded their first inflows in 34 weeks, Lipper FMI numbers showed.

Those funds that report flows weekly posted inflows of $103 million for the week ended Jan. 15. It was the first inflow since the week of May 22. Last week outflows slowed to $19 million.

The muni market's tenor has improved so far in 2014. Tax-exempt yields continue to fall across the curve as investors have mostly cottoned to deals in a slowly expanding calendar and indicators have shown an improving economy.

Assets for all muni funds that report flows weekly rose to $273.9 billion, from $272.4 billion for the week ended Jan 8.

The value of the holdings for weekly reporting funds rose by $1.75 billion. The previous week they increased by $991 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly was $720 million of outflows, compared with $1.17 billion of outflows the week before.

Long-term muni bond funds that report flows weekly have suffered heavy outflows for months. They finally registered inflows of $102 million for the week ended Jan. 15. The week before, those funds reported outflows of $222 million.

High-yield muni bond funds recorded their second week of inflows, at $276 million. The previous week, they reported a $50 million inflow, their first since the week of Oct. 30.

Assets for these high-yield funds declined after their first rise in nine weeks. They slipped to $35.20 billion from $35.32 billion the week before.

The value of the holdings for high-yield funds increased by $370 million, compared with a rise of $179 million the previous week.

The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $105 million of outflows, versus $246 million of outflows the previous week.

James Ramage is a reporter for The Bond Buyer.

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