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.

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