| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Muni Fund Ride Isn't Entirely Bad News |
The Bond Buyer - May 26, 2011 - by James Ramage
For portfolio managers of municipal bond funds, the past several months haven’t been for the faint of heart. Still, muni fund managers report mixed experiences in riding out the prolonged flood of outflows.
At Pioneer Investments in Boston, the investment-grade side has seen outflows. That falls in line with the industry at large. But the high-yield fund has seen positive flows for roughly the past eight weeks, according to Timothy Pynchon, the fund’s manager.
“Not huge flows, but positive,” he said. “That’s tremendous in an otherwise negative outflow environment.”
For the muni bond funds at Thornburg Investment Management in Santa Fe, N.M., outflows were substantially lower than the industry average of almost 9%, according to Christopher Ryon, a portfolio manager there. He declined to say how much they were down at Thornburg.
“We were lucky,” Ryon said. “We tried to make sure that, as managers, we were out talking to shareholders, addressing their concerns about what was driving the markets higher.”
By almost every account, the flood of outflows from muni mutual funds is slowing substantially after 27 straight weeks. Muni funds that report their numbers weekly saw net outflows of $108 million for the week ending May 18, according to Lipper FMI.
That number has fallen considerably from just two weeks earlier, when investors withdrew nearly $800 million.
But muni bond funds saw inflows of $38 million for the week ending May 11, according to the most recent numbers available from the Investment Company Institute.
Likewise, assets for funds that report weekly climbed to $316 billion, Lipper data showed, from $314.1 billion in assets in the week ended May 11. The value of the funds’ holdings rose by almost $2.1 billion. And net asset values gained for the seventh straight week.
Portfolio managers said that “headline risk” after some predictions of rampant defaults across the industry contributed significantly to the outflows.
The risk spooked less-sophisticated investors into pulling their money from muni funds, they said. Since mid-November through the week of May 18, municipal funds have seen a hemorrhaging of almost $49 billion, Lipper numbers showed.
Individual investors in municipals represent mostly a range of high-net-worth individuals. Generally, lower-level high-income investors invest in muni bond funds, while high-net-worth investors on the upper end of the scale buy individual bonds. And many of the more sophisticated investors have been purchasing individual bonds in an attempt to take advantage of buying opportunities created in the wake of market uncertainty caused by bad news about munis.
Around February, investors noticed how spreads between the taxable and tax-exempt markets narrowed, said John Mousseau, a portfolio manager who runs the muni desk at Cumberland Advisors. While yields firmed on the taxable side, they eased for tax-exempts, he said, creating an appetite for tax-exempts among a lot of traditionally taxable buyers.
“Accounts that had been long-term investors, who’d been through a number of interest rate cycles, could see that this was clearly a liquidity-driven and not a credit-driven event,” Mousseau added.
For the complete article.
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