Muni bond fund redemptions jump again
Withdrawals from mutual funds that invest in municipal bonds accelerated last week as prices of the securities fell further.
Investors cashed out a net $4.85 billion from muni funds in the seven days that ended Dec. 15, up from $1.26 billion the week before and the biggest sum pulled out since munis hit the skids in early November, the Investment Company Institute said Wednesday.
Investors now have withdrawn a net $14.2 billion from muni funds since Nov. 3, or about 2.8% of assets.
Prices of bonds in general have been falling, and their yields have been surging, for several weeks. But munis have been hit especially hard: The average yield on the Bond Buyer index of 40 long-term muni bonds rose to 5.73% last week from 4.86% in mid-October.
The higher yields have since attracted buyers. The Bond Buyer index was at 5.5% on Wednesday.
Investors in taxable bond funds cashed out a net $3.77 billion in the latest period, the second straight week of redemptions. The last time taxable funds as a group had net redemptions was in late 2008 during the financial-system meltdown.
But the cash pulled from taxable bond funds in the last two weeks has amounted to less than 0.2% of assets.
More to Read
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
