Junk funds lose another $0.62 billion, year’s 10th down week in 13

New York, March 29 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – were once more in the red during the most recent reporting week.

For the seven days ended Wednesday March 28, the funds saw investors pull out $0.619 billion of cash, according to sources familiar with the fund-flow statistics generated by AMG Data Services Inc.

That outflow for the weekly reporting-only domestic funds comes after a loss of $1.174 billion the previous week, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

The week before the funds had seen a tiny gain of $11 million.

But ahead of that positive blip was a long string of outflows: $525 million in the week ended March 7, $703 million for the seven-day period ended Feb. 28, $335 million for the week ended Feb 21 – and a yawning $6.31 billion cash bleed for the week ended Feb. 14.

According to a Prospect News analysis of the data, that giant-sized outflow was not only by far the biggest cash drain seen so far this year, it was also the second-largest outflow on record since Lipper began tracking fund flows back in 1992, exceeded only by the record $7.07 billion that the funds lost during the week ended Aug. 6, 2014.

The most recent outflow is the ninth negative flow in the past 10 weeks.

Recent trend is negative

According to the Prospect News analysis, this week’s loss was the 10th in the 13 weeks since the start of the year, against just three inflows.

The most recent report increases the cumulative net cash loss to $15.51 billion from $14.89 billion the week before.

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 gain

Looking at fund flows for other asset classes during the week, investment-grade corporate funds saw a modest $0.438 billion inflow for the week to March 28, smaller than the $3.484 billion inflow of the previous week.

That gain, in turn, followed a $2.316 billion inflow which more than reversed the rare $740 million net outflow figure that preceded it.

There was also an outflow during the Feb. 14 week but otherwise it has been all cash additions, including a 21 week stretch before the Feb. 14 week that dated back to mid-September, according to a Prospect News analysis of the data.

The latest gain raises the year-to-date inflow for the IG corporates to $29.58 billion from $26.10 billion the previous week, setting a new peak level for the year so far.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.