Hedge Funds Are Buying More Muni Bonds

02/15/2011 08:32 am ET | Updated May 25, 2011
  • Kate Kelly CNBC

A spike in yields and a desire to diversify portfolios is prompting some unusual investors to jump into the municipal bond market, say traders and analysts.

In recent weeks, traders from Moore Capital Management, the large New York hedge fund that manages some $15 billion, and from Oak Hill Advisors, the New York fund with nearly $13 billion in capital, have been snapping up municipal bonds, say people familiar with the matter.

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