Municipal bond investors and portfolio managers are likely to hoard nearly $11 billion in cash from redemptions in early October as continued heavy supply and current rates of return keep them on the bench.

"With all the new-issue supply, who's got time to worry about" trying to position for calls and certificate of deposit rollovers, said George Friedlander, managing director of portfolio strategy and fixed-income high net worth at Smith Barney, Harris Upham & Co.

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