WASHINGTON, April 10 U.S. municipal bond funds
reported $273.8 million of net inflows in the week ended April
9, a sharp reversal from the $81.3 million in outflows the
previous week, according to data released by Lipper on Thursday
that showed investor appetite for debt with high yields
continues to grow.
High-yield municipal bond funds alone reported much higher
net inflows of $323.5 million, marking the largest week in 2014
for money flowing into funds typically containing lower-rated
For 14 straight weeks money has washed into high-yield
funds, with last week registering $186.2 million of inflows. But
this week's inflows were the largest since the week ended Sept.
25, according to Lipper, a unit of Thomson Reuters.
For all municipal bond funds, the four-week moving average
remained positive at $21.9 million, said Lipper.
Concerns about the financial shape of Puerto Rico and
Detroit last year, along with the possibility of rising interest
rates, prompted investors to flee municipal bond funds in record
amounts. Buyers, though, now appear to be dipping their toes
back into the water as bankrupt Detroit and junk-rated Puerto
Rico edge closer to resolving some of their problems.
The total return for BBB-rated munis was 6.5 percent for the
period spanning Dec. 31, 2013, through the end of March,
according to Bank of America Merrill Lynch. In comparison,
municipal bonds with top AAA ratings only had total returns of
2.43 percent over that timeframe.
(Reporting by Lisa Lambert; Editing by Lisa Shumaker)