Muni bond funds gain $349 million on week, fourth straight inflow

By Paul Deckelman

New York, Oct. 29 – Municipal bond funds saw a net inflow of $349.038 million during the week ended Wednesday, according to data released Thursday by the Lipper analytical services unit of ThomsonReuters Corp.

It was the funds’ fourth straight inflow, following the $240.7 million cash addition reported last Thursday for the week ended Oct. 21.

Before that, the funds had seen inflows of $520.8 million during the week ended Oct. 14 and a $714 million cash gain notched in the week ended Oct. 7.

This week’s inflow was the fifth seen in the last six weeks, including a $231.252 million net gain during the week ended Sept. 23 according to a Prospect News analysis of the figures. The flows are a measure of liquidity in the United States municipal bond market.

That positive trend was interrupted only by a $252 million outflow that the funds suffered during the week ended Sept. 30.

Prior to the recent run of mostly inflows, the funds had seen four straight weekly cash losses before that, totaling $1.438 billion, according to the Prospect News analysis.

These included the $411.069 million outflow reported during the week ended Sept. 16, and before that, an outflow of $95.986 million for the week ended Sept. 9, an outflow of $586.481 million for the week ended Sept. 2 and an outflow of $344.563 million for the week ended Aug. 26.

This week’s inflow is the 22nd seen in the 43 weeks since the start of the year, versus the 21 outflows recorded so far this year.

The $714 million inflow reported three weeks ago was the funds’ largest such cash injection since January, the analysis indicated.

While the muni funds began the year on a strong note, recording consecutive inflows over the first 12 weeks of 2015, they finally suffered their first cash loss of the year during the week ended April 1, an outflow of $300.6 million.

Things went mostly downhill after that, with just a relative handful of inflows (10) adrift in a vast sea of outflows (20), including, at one point, an 11-week losing streak that ran through mid-July during which considerably more investor cash left those funds than came into them, according to the analysis.

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