Muni Fund Flows Healthy, but Could Flag in Fall - RBC says.
Muni mutual funds saw a $ 1.1B inflow this week, the largest since early March, says RBC Capital Markets, citing Lipper FMI data. Firm says that investors should continue to put money into funds throughout August, as there's a hefty amount of cash to reinvest from bond redemptions and coupon payments that's outstripping the supply of new muni bonds available. But this reinvestment cash dwindles in September, "so we would not be surprised to see fund flows slow down" then, RBC says..
"These weaker technicals, combined with the growing swirl of political activity associated with the election and the increasing concentration on 'fiscal cliff' issues, could make for a sloppy market this fall."