Investors Flee U.S. Municipal-Bond Mutual Funds for 12th Consecutive Week
Meredith Whitney, CEO ofMeredith Whitney Advisory Group
Jonathan Fickies/Bloomberg
Meredith Whitney, founder and chief executive officer of Meredith Whitney Advisory Group LLC.
Meredith Whitney, founder and chief executive officer of Meredith Whitney Advisory Group LLC. Photographer: Jonathan Fickies/Bloomberg
Feb. 2 (Bloomberg) -- Wayne Atwell, managing director at Casimir Capital LP, discusses the impact of the unrest in Egypt on global metal markets. Atwell speaks with Lisa Murphy on Bloomberg Television’s “Fast Forward.” (Source: Bloomberg)
Jan. 13 (Bloomberg) -- Richard Larkin, director of credit analysis at Herbert J. Sims & Co., discusses bank analyst Meredith Whitney's outlook for municipal bonds. Whitney, who correctly predicted Citigroup Inc.’s dividend cut in 2008, said yesterday that she expected 50 to 100 “significant” municipal-bond defaults this year totaling “hundreds of billions” of dollars. Jon Erlichman reports on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Investors pulled money from U.S. municipal-bond mutual funds for the 12th consecutive week and added cash to domestic stock funds for the third straight time, the longest streak of deposits since April.
Muni-bond funds had net redemptions of $2.7 billion in the week ended Jan. 26, the Investment Company Institute said today in an e-mailed statement from Washington. The withdrawals, triggered by concern that financially strapped cities and states may default, total $33.5 billion over the 12-week stretch.
U.S. municipal bonds lost 5.3 percent in the three months ended Jan. 31, according to the Bank of America Merrill Lynch Municipal Master Index. Banking analyst Meredith Whitney stirred debate in the $2.86 trillion muni-debt market by predicting in December as many as 100 significant defaults this year reaching “hundreds of billions” of dollars.
Investors added $3.2 billion to domestic stock funds in the most recent week. In April, the funds attracted money for four weeks in a row, ICI data show. The Standard & Poor’s 500 Index of U.S. equities has climbed about 3.7 percent this year.
To contact the reporters on this story: Charles Stein in Boston at cstein4@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
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