Munis break streak, stocks stutter: Lipper

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Agencies: New York, Jun 10 2011, 12:32 IST
U.S. municipal bond funds had net inflows of $274 million in the week ended June 8, breaking an outflow streak that started in mid-November, while all U.S.-domiciled equity funds suffered $6.45 billion in net redemptions, data from Lipper showed on Thursday.

* U.S. municipal bond funds break 29-week outflow streak

* Munis take in a net $274 mln in week ended June 8

* Equity fund net outflows of $6.45 billion

* US large-cap fund outflows: $103.9 bln since mid-2009

* Taxable bond fund inflow streak at 25 weeks

The inflows for muni bond funds mark a break in the negative sentiment investors had expressed over the long-term fiscal pressures on state and local government budgets.

Chris Mier, muni market strategist at Loop Capital Markets in Chicago, said fund investors may have been wooed to the market after headlines predicting doom and gloom for munis eased and other investors came back.

In the muni bond sector, the return of fresh capital comes after 29 straight weeks of outflows that resulted in a cumulative withdrawal of $35.1 billion.

The case for buying muni bond funds however had been building for the past 2-1/2 months.

It was the 10th consecutive week of positive returns for muni bond funds and they finally got their positive flows for the week, said Tom Roseen, senior analyst at Lipper.

In the taxable bond sector, inflows kept up a steady pace, bringing in $4.5 billion and putting the cumulative 25-week inflow streak at $90.6 billion.

Corporate investment grade bond funds were the standout stars for fixed income in the

... contd.

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