Investors fled municipal bond funds this week, resulting in the largest amount of net redemptions since the beginning of January 2011, and the fifth largest on record.

Funds that report their flows weekly posted net outflows of $2.3 billion for the week ended Dec. 19, Lipper FMI numbers show.

This was the first time in eight weeks that municipal bond funds handed money back to investors.

Though funds have been recording inflows in past weeks, the amounts have been steadily declining.

For the week ended Dec. 12, funds reported weekly inflows at $311 million, down from $489 million the week before, which was down from $545 million the previous week.

Triple-A tax-exempt yields in the 10- and 20-year maturities jumped 20 to 22 basis points, respectively, over the week-long period ending Dec. 19, according to Municipal Market Data.

"Some of the outflows likely reflect investor uncertainty over the fiscal cliff, 2013 tax rates, and the future effective value of municipal tax exemption," JPMorgan analysts wrote in a research note.

All term municipal bond funds also saw a $3.9 billion decline in asset values due to market changes, for an aggregate asset decline of $6.2 billion, according to JPMorgan.

Chris Mauro, director of municipal research at RBC Capital Markets, believes that the red ink in fund flows this week is a result of a confluence of events, including a desire to take capital gains while the tax treatment is still favorable.

Other factors include the aftershock of the Moody's Investors Service downgrade of Puerto Rico, a correcting, calendar-heavy municipal market in the weeks after the election, and a generic sense of uncertainty surrounding fiscal cliff negations.

"We think that this week's flows are a temporary phenomenon and don't signal a return to the kind of mammoth, extended outflows that we experienced in 2010 and 2011," Mauro wrote in a research note.

"Instead, we suspect that the holiday period will serve as a welcome circuit breaker that will allow cooler heads to prevail once the calendar returns."

Long-term bond funds that report their flows weekly accounted for the majority of outflows, totaling a net of $1.9 billion. Outflows from high-yield funds accounted for about half of the long fund losses.

The ten funds reporting the largest net outflows include three high-yield, four national investment grade, one California single-state, one intermediate, and one ultra-short fund.

Year-to-date inflows into municipal bond funds now total $50.7 billion.