UPDATE 1-U.S. muni bond funds report $159.4 mln in outflows-Lipper
SAN FRANCISCO, Sept 26 (Reuters) - U.S. municipal bond funds reported $159.4 million of net outflows in the week ended Sept. 25, compared with $1.1 billion in outflows in the previous week, according to data released by Lipper on Thursday.
The four-week moving average remained negative at $1.1 billion, said Lipper, a unit of Thomson Reuters.
Municipal bond funds have now marked 18 consecutive weeks of withdrawals. Eyeing gains in the stock market, Detroit's bankruptcy and a wobbly economy in Puerto Rico, investors have steadily pulled more money from municipal bond funds than they have invested since the week ended May 29.
The latest week's reduced outflow was the result of the recent upward correction in municipal bond prices which rallied in September, said Daniel Berger at Municipal Market Data.
"It is the first time the outflow goes below $1 billion since mid July and it is the first time it is so low since the end of May. This is showing increased support for the market," Berger said.
Yields on triple-A 10-year bonds fell by more than 50 basis points in the last 20 days. They closed at 2.54 percent on Thursday down from 3.04 percent on Sept. 5, according to MMD, a unit of Thomson Reuters.
Funds holding high-yield municipal bonds, which usually have lower credit ratings, posted $399.45 million of net inflows during the latest week. A week earlier, the high-yield funds reported $180.71 million in net inflows.
Exchange-traded muni bond funds posted net outflows for the week of $5.07 million, compared with the $134.11 million withdrawn by investors on a net basis from the funds in the previous week.
Separately, buying interest for individual bonds dropped for the third week in a row, according to data from BondDesk Group LLC. Retail investors bought 1.9 municipal bonds for every one they sold in the week ended Sept. 25, down from 2.3 during the previous week. The number of bonds bought totaled 76,465, while the number of bonds sold was 39,515.
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