UPDATE 1-U.S. muni fund weekly outflows jump to $391 mln -Lipper

Thu May 2, 2013 6:13pm EDT

May 2 (Reuters) - U.S. municipal bond funds reported a jump of net outflows to $391.3 million in the week ended May 1 from $102 million of outflows during the previous week, according to data released by Lipper on Thursday.

The four-week moving average remained negative for a seventh week in a row with an outflow of $414.7 million, said Lipper, a unit of Thomson Reuters.

This was the ninth straight week of outflows, marking the longest run of weekly outflows since 2011, according to Lipper. Popular with individual investors, the funds have been hit by competition from surging equities and by selling by investors needing to pay tax liabilities.

Flows into high-yield muni funds were also negative. Funds reported $73.6 million of net outflows in the week ended May 1 compared with $86.2 million of net outflows in the week ended April 24.

Exchange-traded municipal funds reported net inflows of $53 million in the latest week following $7.55 million of net inflows in the prior week, according to Lipper.

Meanwhile, retail investors bought 1.8 muni bonds for every one they sold in the week ended May 1, a turn up from a 1.6 pace during the previous three weeks, according to BondDesk Group. The number of bonds bought totaled 59,594, while the number of bonds sold was 33,498.

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