Junk funds gain $0.53 billion after previous week’s big outflow

New York, May 3 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – added $0.526 billion of cash in the week to May 2, according to fund-flow statistics generated by AMG Data Services Inc.

The inflow came after a large $2.489 billion loss the previous week which reversed a large part of the $2.971 billion inflow recorded the week before that, ended April 18, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

With an inflow in the latest week, a choppy pattern has taken hold in the fund flows.

The April 11 week saw a gain of $989 million which ended a three-week run of losses – of $573 million, $619 million and $1.174 billion – which in turn succeeded a minuscule $11 million gain in the week to March 14.

Before that there had been 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 week’s influx of cash, the funds have now seen four gains and six outflows in the past 10 weeks.

Year-to-date still negative

Despite the latest gain, the cumulative year-to-date figure for high-yield fund flows is still firmly in the red at negative $14.08 billion, a little improved from $14.61 billion the previous week and comfortably the low point for the year of $16.08 billion recorded in the week ended April 4.

In total this year has seen six inflows and 12 outflows in the 18 weeks so far, according to the Prospect News analysis.

IG corporates add more cash

Among other asset classes, investment-grade corporate funds saw yet another inflow, this time for $0.997 billion.

The gain comes after an addition of $2.010 billion the previous week, $1.535 billion the week before that and $3.346 billion the week before that.

The IG funds have now seen eight straight inflows.

Apart from the Feb. 14 and Feb. 21 weeks, every week so far this year has seen positive flows and in fact before those two weeks in February investment-grade corporates saw a 21-week run of inflows dating back to mid-September, according to a Prospect News analysis of the data.

The latest new funds raise the year-to-date inflow for the IG corporates to $39.03 billion from $38.03 billion, once again setting a new peak level for the year so far.

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