Most Withdrawals of ’13 Ignore History of July Gain: Muni Credit
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Mutual-fund investors pulling the most funds since December from the $3.7 trillion municipal market are creating an opportunity for buyers of individual local bonds as tax-exempt yields reach a 15-month high.
Municipal funds saw $1.5 billion of withdrawals last week, the largest outflow of 2013, Lipper US Fund Flows data show. Speculation the Federal Reserve will reduce its bond buying has pushed 10-year muni yields to the highest since March 2012. Yet sellers are ignoring more than two decades of history. Munis have gained in 21 of the last 24 years in July, Bank of America Merrill Lynch data show.