Municipal bond mutual funds suffered outflows for an eighth week as investor demand for tax-exempts continued to flag.
Those funds that report flows weekly recorded outflows of $1.56 billion from muni bond funds for the week ended July 17, according to Lipper FMI, up from the $1.20 billion investors withdrew the previous week.
The muni market navigated a busy week of economic indicators and testimony that Federal Reserve Chairman Ben Bernanke gave on Capitol Hill, as well as a considerable calendar. Tax-exempt yields underperformed those of Treasuries across the curve, but did end slightly lower through the intermediate portion of the curve.
For the week from last Friday, the benchmark triple-A tax exempt yield fell two basis points to 2.63%. The 30-year rose three basis points to 4.03%; the two-year yield dropped two basis points to 0.43%.
Assets for all muni funds that report their flows weekly fell once again to $300.7 billion. The previous week they reported a $300.9 billion hit.
The value of the holdings for weekly reporting funds plummeted $1.04 billion. The week before, they fell $2.58 billion.
The four-week moving average for all municipal bond mutual funds that report their flows weekly was $1.04 billion of outflows, compared with $2.21 billion of outflows the week before.
Weekly reporting long-term muni bond funds had heavy outflows for the week, as well, at $1.03 billion. That compares with $857 million that flowed from long-term muni bond funds last week. Outflows to long-term funds continued for a 20th consecutive week.
High-yield muni bond funds that report flows weekly also recorded outflows, at $246 million. The previous week, they reported $207 million in inflows.
Assets for high-yield funds that report their flows weekly rose to $39.13 billion, from the $39.06 billion reported the week before.
The value of the holdings for high-yield funds increased by $47 million. Last week, they fell by $513 million.
The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $378 million of outflows, from $529 million of outflows the week before.