Junk funds gain $433 million this week, second straight net inflow

By Paul Deckelman

New York, Sept. 28 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – were in positive territory this week, their second consecutive weekly gain, according to numbers released on Thursday.

Sources familiar with the fund-flow statistics generated by AMG Data Services Inc. said that $433 million more came into those weekly-reporting-only domestic funds than left them during the week ended Wednesday, Sept. 27.

That inflow follows the $866 million gain reported last Thursday by the Arcata, Calif.-based unit of Thomson Reuters Corp.’s Lipper analytics division for the seven-day period ended Sept. 20.

Those two inflows, totaling just under $1.3 billion, had followed a $96 million net outflow during the week ended Sept. 13.

Year-to-date outflow narrows

According to a Prospect News analysis of the data, this week’s inflow was the 19th so far this year, versus 20 outflows during that time.

It was the fifth cash gain in the last 10 weeks, dating back to the week ended July 26, versus five cash losses seen during that time.

This week’s inflow narrowed the year-to-date net outflow number to $7.98 billion from last week’s $8.41 billion.

Those cumulative outflow totals remain below the $9.82 billion of red ink seen during the Aug. 30 week, the widest year-to-date net outflow figure.

Cumulative fund-flow estimates may be revised upward or downward or they may be rounded off and could include unannounced revisions and adjustments to figures from prior weeks.

IG corporates rebound again

Looking at fund flows for other asset classes during the week, investment-grade corporate funds posted their second consecutive weekly gain following the rare occurrence of two straight weekly losses.

The Lipper calculations indicated that the funds saw a net inflow of $1.18 billion during the reporting week ended Wednesday, on the heels of a $2.86 billion upturn last week.

Those two inflows had followed net outflows of $25 million during week ended Sept. 13 and $43 million during the week ended Sept. 6, which had been the first loss of the year after 35 straight inflows this year and 37 inflows overall dating back to the week ended Dec. 21, 2016, according to a Prospect News analysis of the data.

This week’s inflow raised the year-to-date net inflow figure to $91.284 billion from last week’s $90.1 billion, establishing a second consecutive new 2017 cumulative peak level.

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