The Fourth of July holiday week slowed the tax-exempt market down to a crawl. But investors continued to invest in municipal bond mutual funds.

Muni bond funds saw $317 million of inflows from funds that report their flows weekly for the week ended July 4, according to Lipper FMI. They have seen inflows for a dozen straight weeks.

The numbers fell from those of the previous week. There were net inflows of $625 million the week ended June 27, and the market has now seen positive flows for 41 of the past 44 weeks.

Tax-exempt yields since last Friday have skipped down on the intermediate and long ends of the curve. Investors remain anxious to put money to work. They are flush with cash because July is the top municipal redemption month of the year, industry experts say.

For the second consecutive week, muni yields underperformed those of Treasuries. That means muni yields to Treasuries remained in cheaper territory, particularly at the intermediate and long ends of the curve. Ratios in the two, 10- and 30-year marks each held at greater than 100%.

This past week, assets for all muni funds that report their flows weekly rose to $301.8 billion from $300.7 billion the previous week.

The value of the holdings for weekly reporting funds rose by $774 million. The week before, they increased by $221 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly saw a $466 million inflow, dropping from a $535 million gain the week before.

Long-term bond funds continued to see inflows, as well. For the first time in months, they represented a smaller portion of the overall figure for muni bond funds.

Long-term bond funds that report their flows weekly saw inflows to the tune of $127 million, a decrease from $364 million the week before.

Inflows to high-yield muni funds remained in the black. They have seen inflows for 15 consecutive weeks, and 29 of the previous 30 weeks.

High-yield funds that report weekly saw $143 million in inflows, Lipper said. The previous week, they reported $204 million in inflows.

Assets for high-yield funds that report their flows weekly increased to $41.44 billion, up from $41.12 billion the previous week.

The value of the holdings for weekly reporting funds rose by $168.4 million. Last week, they increased by $61.6 million.The four-week moving average for all high-yield muni bond funds that report their flows weekly was nearly $167 million of inflows, down from a $177 million the week before.