Fixed income

The Municipal Securities Rulemaking Board plans to seek public comment on a series of new rules and interpretive guidance in the next four to six weeks, most of which stem from its new oversight of muni advisors

Municipal bond mutual fund outflows moderated last week as a nervous market seemed better able to absorb the relentless fund selling.

To calm frightened investors pulling out of muni-bond funds, Vanguard, which manages $115 billion in municipal bonds, has been tweeting excerpts from a new research commentary "California is Not Greece."

Investors in tax-exempt debt should be cautious about heeding recent reports about the possibility of widespread bankruptcy and default in the municipal market, and stop running away from solid, safe investments because of distorted opinions in the media.

Volatility and speculation about defaults and bankruptcies in the municipal market continue to spook issuers and investors, affecting volume in the primary market.

Tax-exempt money market funds posted their first decline since mid-December as outflows of $4.35 billion trimmed total net assets to $329.91 billion for the week ended Jan. 17, according to the Money Fund Report, a service of iMoneyNet.com.

The sophisticated investor in retail municipal bonds has ­remained calm the past few months even as mutual funds have dumped state and local ­government debt by the truckload.

The Securities and Exchange Commission approved two sets of rules for asset-backed securities Thursday, including one that would apply to certain municipal securities in early 2015.

Redemptions since Dec. 2 total $15.76 billion.

According to a company memo, “a big driver of [Morgan Stanley's] future success will be the continued build-out of our sales and trading platform and, in particular, our strategy and footprint in fixed income."

The company indicated in a Thursday SEC filing it is postponing its plans to offer short-, intermediate- and long-term municipal bond index funds.

Most municipal bond exchange-traded funds in the fourth quarter performed noticeably worse than the indexes they were designed to track. Or, depending on your perspective, they performed noticeably better.

Investors kept pulling their cash from municipal bond mutual funds at a record pace last week as frightened money continued to flee the market.

No sooner did Build America Bonds become orphaned than they caught fire.

For more yield, consider actively managed funds with broad discretion and floating rate funds

Bank of America Merrill Lynch in 2010 reclaimed its title as the top underwriter of municipal debt, thanks mainly to its dominance in the competitive market.

Despite dire warnings of imminent government collapse, since the middle of 2009, only three municipal issues in the “safe” sectors--general obligation, tax backed and essential services—have defaulted, according to Municipal Market Advisor’s data.

Municipal market groups next year will face an uphill battle trying to get Congress to resurrect the Build America Bond program and other bond-related tax incentives that expire Dec. 31.

MFS Investment Management has historically been best known for its equity funds — but it’s the firm’s Municipal High-Income Fund (MMHYX) that stands out as a gem of consistency.

Clearly Loomis Sayles is not going to pay heed to the weekly ups and downs of bond market activity with this fund.