Article: High-Yield Debt Captured Funds'Minds and Money in 1st Quarter.

The fourth quarter's rally in high-grade municipals didn't just peter out. For general municipal bond funds, the average 1.93% they returned for the first quarter of 2001 amounted to a thud after the sparkling 4.25% average return the funds produced in the fourth quarter, according to data from Lipper Inc.

Ravaged by outflows for nearly a year and a half and unable to afford the liquidity risk, funds had been neglecting high-yield bonds for a long time, which culminated in a large sell-off of the riskier securities amid economic fears towards the end of 2000. But as investors fleeing equities began trickling -- and then pouring -- back into municipal bond funds ...

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