Tax season has come and gone, yet the run of outflows from municipal bond mutual funds dragged into its ninth straight week.
Muni bond funds that report their flows weekly saw $391 million leave the market for the week of May 1, Lipper FMI numbers showed. The hemorrhaging is up from the week of April 24, when weekly reporting funds saw $102 million in outflows.
The municipal market saw yields fall on the week amid decent activity in both the primary and secondary markets up through Wednesday. The tax-exempt yield curve is flattening, as the long end has strengthened by eight basis points over the week since last Friday; the 30-year yield now stands as 2.79%.
The 10-year triple-A sits at 1.63%, down four basis points over the period. The two-year yield has held fast at 0.29% for 20 consecutive trading sessions.
Investors demonstrated an appetite for the weeks largest issues, including a high-grade $350 million New Jersey deal and an enormous $1.2 billion Iowa fertilizer junk-bond deal.
Treasuries had a moderately strong week, as well. Yields fell four basis points at the 10- and 30-year parts of the curve. Muni ratios to Treasuries continued to hover around 100% beyond the front end of the curve, with the 10-year at 102% and the 30-year at 99%.
Assets for all muni funds that report their flows weekly rose after falling for two consecutive weeks to $328.5 billion. The week prior, they reported $326.4 billion.
The value of the holdings for weekly reporting funds rose by $1.58 billion. The week before, they rose by $43 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $415 million of outflows, compared to $386 million in outflows the week before.
Outflows continued for long-term bond funds that report their flows weekly, at $118 million. They reported $132 million of outflows last week.
High-yield muni funds recorded their second consecutive week of outflows, following two straight weeks of inflows.
High-yield funds that report flows weekly saw $74 million in outflows, Lipper said. The previous week, they reported $86 million in outflows.
Assets for high-yield funds that report their flows weekly rose to $46.02 billion, up from $45.75 billion reported the week before.
The value of the holdings for weekly reporting high-yield funds rose by $349 million. Last week, they increased by $17 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $18 million of outflows, falling from $10 million of outflows the week before.