Junk funds add $2.97 billion, three times previous week’s gain

New York, April 19 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – attracted $2.971 billion of new investor cash in the week to April 18, according to fund-flow statistics generated by AMG Data Services Inc.

The inflow followed a gain of $989 million the week before, which had ended a three-week run of losses, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

Those three weeks of red ink – $573 million, $619 million and $1.174 billion – had come after a tiny $11 million gain in the week to March 14 which in turn had come after a substantial period of outflows including the 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.

With the latest inflow, the funds have now seen three gains and seven outflows in the past 10 weeks.

Year-to-date still negative

However the latest week’s positive number made only a small impact on the year-to-date cumulative cash loss, trimming it to $12.12 billion from $15.09 billion the week before. The low point so far this year is the $16.08 billion from the week before that, ended April 4.

In total this year has seen five inflows and 11 outflows in the 16 weeks so far, according to the Prospect News analysis.

IG corporates gain

In a rarity for among the fund flows so far this year, high yield actually had a bigger inflow than investment-grade corporate funds, which added $1.535 billion of cash, according to the data.

That gain came after a substantial $3.346 billion inflow in the previous week and a $1.554 billion addition for the week to April 4.

The latest week marks the sixth straight inflow for the investment-grade funds.

They previously saw a $0.438 billion inflow for the week to March 28 and a $3.484 billion inflow the previous week.

Those gains, 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 $36.02 billion from $34.48 billion the previous week, once more setting a new peak level for the year so far.

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