This week (April 8, 2011 – April 15, 2011) saw more of news about the US government’s deficit battle. Tax-free Mutual funds saw continued outflows. Tax-free money market funds saw major outflows, undoubtedly for people to pay their taxes. The mutual funds we track were unchanged or up nicely this week and for the month, fund yields mostly fell slightly. Longer duration mutual funds moved up more than shorter duration funds. The Weeks municipal bond news included:
- San Francisco saw Fitch downgrade some of their municipal bonds due to the use of most of its remaining discretionary reserves, amid continued sizable budget pressures. They did upgrade San Francisco’s future Outlook to stable, as the revenue picture was improving with the economy, and voter approved taxes and fees increases are kicking in. Hopefully this will remind San Francisco to get it fiscal act together. (SFgate)
- Citibank lost a municipal bond fund case and was ordered to pay $54.1 million to to wealthy investors for their losses. The fund borrowed as much as $7 for every one dollar invested. Money was invested in municipal bonds and mortgage debt. Definitely try to avoid leverage when purchasing mutual funds. (WSJ)
Vanguard Municipal Bond Mutual Fund Weekly Price Movement (Detailed stats)
Vanguard Tax-exempt Money Market fund (VMSXX) is yielding 0.11%, 0.0% for the week.
Vanguard Short Term Tax-Exempt Fund (VWSTX) +0.06% for the week.
Month to date: +0.06%. February 2011 +0.16%. Current Yield 0.77%.
Vanguard Limited Term Tax-Exempt Fund (VMLTX) 0.18% for the week.
Month to date: +0.18%. February 2011 +0.45%. Current Yield 1.38%.
Vanguard Intermediate Term Tax-Exempt Fund (VWIUX) +0.37% for the week. Month to date: +0.22%. February 2011 +1.52%. Current Yield 3.31%.
Vanguard California Intermediate term municipal bond fund (VCAIX) 0.46% for the week. Month to date: 0.37%. February 2011 +1.72%. Current Yield 3.46%.
Fidelity Municipal Bond Mutual Fund Weekly Price Movement (Detailed stats)
Fidelity Short-Intermediate Muni Income Bond Fund (FSTFX) +0.09% for the week.
Month to date: +0.09%. February 2011 +0.30%. Current Yield 1.73%.
Fidelity California Intermediate term municipal bond fund (FCSTX) +0.09% for the week.
Month to date: +0.09%. February 2011 +0.48%. Current Yield 1.69%.
See how the Fidelity intermediate term municipal bond fund (FCSTX) and Vanguard California intermediate term municipal bond fund (VCAIX) performed this week on this graph:
See how the municipal bond mutual funds we listed above performed this year on this graph: