Great rotation or not, more money hemorrhaged from municipal bond mutual funds this past week.
Outflows occurred for the sixth straight week despite the reasonably strong reception investors gave to the week's surge in issuance and the uptick in secondary activity. Funds that report their flows weekly saw $631 million in outflows for the week ended April 10, Lipper FMI reported. For the week of April 3, the market saw outflows of $278 million.
Around midweek, $2 billion deals from California and Florida both arrived and were reasonably well received, traders reported. In the secondary, activity on Tuesday and Wednesday closed higher than 30-day averages, according to MSRB numbers.
Muni bond yields outperformed those of Treasuries on the week since Friday, even though both saw weakening over the span. The 10-year triple-A rose three basis points on the week to 1.74%.
The 30-year yield increased four basis points to 2.97%. The two-year held steady over the week from Friday at 0.29% for a fifth consecutive session.
Muni ratios to Treasuries beyond the front end of the yield curve pushed lower into rich territory over the week. Both the 10-year and the 30-year settled below 100%.
Assets for all muni funds that report their flows weekly rose for a fourth straight week to $327.4 billion. The week prior, they reported $326.8 billion.
The value of the holdings for weekly reporting funds rose by $1.15 billion. The week before, they rose by $869 million.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $303 million of outflows, falling from $174 million in outflows the week before.
Long-term bond funds that report their flows weekly still saw outflows, but they were considerably lighter than they have been over the past several weeks, at just $54 million. That represented a large increase from the $205 million of outflows they reported the week before.
High-yield muni funds are shifted back to reporting inflows after a week of outflows, and have been oscillating back and forth over the past month. For most of 2012 and 2013, flows were and have been positive.
High-yield funds that report weekly saw $66 million in inflows, Lipper said. The previous week, they reported $41 million in outflows.
Assets for high-yield funds that report their flows weekly rose to $45.61 billion. They're up from $45.35 billion reported the week before.
The value of the holdings for weekly reporting high-yield funds rose by $195 million. Last week, they increased by $171 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed just $1.1 million of inflows, rising slightly from $36 million of outflows the week before.