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Muni bond funds 'on sale'

Assets have begun steadily draining out of municipal bond funds as interest rates rise.

By Rich White | Updated on September 19, 2013

As interest rates rise, assets have begun steadily draining out of municipal bond funds. The best barometer of sinking demand, published by the Investment Company Institute (ICI) weekly, showed a net outflow of $34 billion from muni bond mutual funds from mid-April through mid-August. You can access it here:

In addition to about $540 billion held by long-term municipal bond mutual funds, muni closed-end funds (CEFs) hold more than $80 billion. Some of these CEFs soon may represent the best bargains in a down market – the equivalent of “municipal bonds on sale.”

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