US municipal bond market ticks up to $3.8337 trillion in Q4, Fed says

Utah Department of Transportation (UDOT) workers watch as a 2,178 ton bridge is moved by a Mammoet transporter onto support columns at the Diverging Diamond Interchange over Interstate 15 from the 'bridge farm' construction area 650 yards away in American Fork, Utah.

George Frey | Bloomberg | Getty Images

The U.S. municipal bond market grew slightly to $3.8337 trillion in the fourth quarter of 2016 from a revised $3.8334 trillion in the third quarter, according to a quarterly report from the Federal Reserve released on Thursday.

Households, or retail investors, held $1.644 trillion of muni bonds compared to $1.588 trillion the previous quarter.

Property and casualty insurance companies bought $10.8 billion of munis in the fourth quarter after $19 billion of acquisitions in the third quarter. Life insurance companies added $5.4 billion to their muni holdings, while U.S. banks picked up $53.4 billion.

U.S. mutual funds shed $88.5 billion of munis in the fourth quarter, the funds' biggest reduction of the asset class in at least five quarters. Exchange traded funds added $4.9 billion.

Foreign buyers purchased $21 billion of munis. Their fourth-quarter holdings were $106.4 billion, their highest on record.