Municipal mutual funds reported inflows for a third straight week, as the prospect of lower interest rates lured investors.
Funds that report weekly said inflows slowed to $247 million in the period ended Feb. 26 from $320.04 million of inflows the week before, according to Lipper FMI.
Assets of all weekly reporting municipal funds increased to $280.1 billion from $278.72 billion. The four-week moving average slumped to $105.47 million from $127.11 million.
Muni mutual funds have recorded inflows in six of the past seven weeks, after a string of 33 straight outflows when investors fled the market as interest rates rose in anticipation of the Federal Reserve's decision to start tapering economic stimulus.
"For the most part, there are expectations for rates to be lower and to stabilize making munis more attractive," said Matt Fabian, managing director of Municipal Market Advisors. "Investors are more bullish. News about muni performance propels investors to look for better movement,"
Inflows to long-term municipal mutual funds that report their flows weekly slipped to $50.57 million from $156.79 million of inflows the previous week. Their assets inched up to $149.65 billion after ending at $148.78 billion in the week before. The four-week moving average of the long-term funds improved to $588.3 million from negative $20.24 million the week before.
Inflows to high-yield mutual funds slowed to $154.68 million from the previous week's $244.78 million. Assets rose to $381.88 billion, up from $377.65 billion the week before, while the four-week moving average dropped to $164.18 million from $200.77 billion.
Maria Bonello is a reporter for The Bond Buyer.