Muni Bonds Fall for 13th Straight Week

Exchange-traded and emerging market equity funds also suffer continued outflows

Municipal bonds fell for the 13th consecutive week, Reuters reported Thursday. Outflows reached $1.2 billion in the week ending Feb. 9, compared with $1.1 billion in the prior period. Net outflows since mid-November are at $21.67 billion.

Exchange-traded equity funds suffered their third week of outflows, with $2.07 billion for the week ending Feb. 9. The SPDR S&P 500 ETF had the biggest outflow of the week with redemptions over $3.2 billion, according to Reuters.

"More proof of investors taking an active role in the equity market is the fact that conventional funds took in cash ($4.6 billion) for a 17th week out of the last 18 whereas ETF equity funds had net redemptions of $2.1 billion," Tom Roseen, senior analyst at Lipper, told Reuters.

Emerging market equity funds suffered as well, although the decline was "significantly less than last week's record outflow," according to Reuters. Following a record $4.1 billion in net redemptions in the prior period, in the week ending Feb. 9 emerging market equity funds including ETFs had outflows of $705 million. Without ETFs, actively managed emerging market funds took in $171 million.

"Investors were using ETFs to get into emerging markets but they are certainly exiting now. However it isn't all negative as the actively managed open-end emerging market funds took in fresh capital," Roseen added.

The Treasury and mortgage fund group had outflows of $494 million, compared with $77 million in the prior week. Treasury-focused funds had outflows of $276 million, though these are the first net redemptions in eight weeks, according to Reuters. Government mortgage funds fared slightly better, with outflows of $167 million. Reuters notes that this sector has had outflows in 17 out of the last 18 weeks.

Bank loan funds, however, have enjoyed a 31-week run on inflows, with a net $1.05 million in the week ending Feb. 9.

Reprints Discuss this story
We welcome your thoughts. Please allow time for your contribution to be approved and posted. Thank you.

Most Recent Videos

Video Library ››