NEW YORK U.S. municipal bond funds posted $367 million of net inflows in the week ended July 13, after outflows of $272 million in the previous week, according to Lipper data issued on Thursday.
Until the week ended June 8, municipal bonds funds had recorded 29 straight weeks of redemptions. Since then, they have shifted between positive and negative flows, posting inflows for the weeks ended June 22 and June 29 and outflows for the weeks ended June 15 and July 6.
The latest week's inflow was the best showing for the funds since the week ended October 27, 2010, when they experienced $433 million of inflows.
The four-week moving average turned positive, rising about $99 million after a decline of around $36 million in the previous week. In the week ended June 29, this measure turned positive for the first time in 33 weeks, according to Lipper, a unit of Thomson Reuters.
High-yield muni funds recorded an inflow of about $67 million in the latest week after seeing an outflow of $27 million the week before.
Exchange Traded Funds had a $1.8 million inflow after a $6.8 million inflow the previous week, Lipper said. This was the fourth consecutive week of inflows.
Lipper suffered a technical glitch when e-mails to subscribers and its website showed zeros for the latest week's data. Roughly an hour later, the data was correctly updated.
TREND: MORE BUYING OF INDIVIDUAL BONDS
Muni funds have been popular with individuals in the U.S. municipal bond market. But many retail investors late last year became worried about the shaky state of local government finances and forecasts of a coming avalanche of municipal bond defaults.
According to Bonddesk's market transparency report released on Monday, retail investors stepped up their buying of individual muni bonds last month, purchasing 2.6 bonds for every one bond sold. That was up from May's ratio of 2.4 to 1.
"For the third consecutive month, trade volumes and yields were relatively consistent, suggesting the frenzied trading activity and escalated fears of January and February are no longer impacting the market," the report said.
On Wednesday, the Investment Company Institute reported muni bond funds had a net inflow of $238 million for the week ended July 6, logging gains for the ninth straight week.
Before early May, muni funds had seen 26 consecutive weeks of redemptions, ICI said.
(Reporting by Chip Barnett; Additional reporting by Karen Pierog in Chicago and Daniel Bases; Editing by Jan Paschal)