The municipal bond market may have had an uninspiring week of frozen yields, but it continued its hot hand with inflows to muni bond mutual funds.
Muni bond funds saw $625 million of inflows from funds that report their flows weekly for the week ended June 27, according to Lipper FMI. They have seen inflows for 11 consecutive weeks.
The numbers rose from those of the previous week. There were net inflows of $555 million the week ended June 20. The market has now seen positive flows for 40 of the past 43 weeks.
Tax-exempt yields have held their levels since last Friday. The week’s calendar, estimated at more than $8.3 billion, met an audience hungry to put money to work. Investors have reached the heart of the period for redemption; July is the top municipal redemption month of the year, according to Janney Capital Markets municipal bond research.
Muni yields underperformed those of Treasuries on the week. This means that muni yields to Treasuries rose into cheaper territory, particularly at the intermediate and long ends of the curve. Ratios in the two, 10- and 30-year marks each sit at 100% or higher.
This past week, assets for all funds that report their flows weekly increased to $300.7 billion from $299.8 billion the previous week.
The value of the holdings for weekly reporting funds rose by $221 million. The week before, they increased by $172 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $535 million inflow, rising from a $488 million gain the week before.
Long-term bond funds also saw strong inflows, as well. They continue to comprise a significant portion of the overall figure for muni bond funds.
Long-term bond funds that report their flows weekly saw inflows to the tune of $364 million. That’s a slight increase from $354 million the week prior.
Inflows to high-yield muni funds inched higher. They have seen inflows for 14 consecutive weeks, and 28 of the previous 29 weeks.
Funds that report weekly saw $204 million in inflows, Lipper said. The previous week, high-yield funds reported $155 million in inflows.
Assets for high-yield funds that report their flows weekly increased to $41.12 billion, up from $40.86 billion the previous week.
The value of the holdings for weekly reporting funds rose by $61.6 million. Last week, they increased by $58.4 million.
The four-week moving average for all high-yield muni bond funds that report their flows weekly was almost $177 million inflow, up from a $160 million inflow the week before.