Junk funds continue choppy pattern, losing $0.76 billion on week

New York, May 10 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – continued their recent back and forth swings in the latest week, losing $0.755 billion of cash in the week to May 9, according to fund-flow statistics generated by AMG Data Services Inc.

That outflow more than reversed the $0.526 billion gain the previous week, ending May 2, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’s Lipper analytics division.

The preceding weeks saw alternating inflows and outflows too: a large $2.489 billion loss, which undid much of the $2.971 billion inflow recorded in the April 18 week.

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 red ink, the funds have now seen four gains and six outflows in the past 10 weeks.

Year to date still negative

The most recent outflow further widened the year-to-date deficit, expanding it to $14.84 billion, down from $14.08 billion the previous week although above the year’s trough of $16.08 billion recorded in the week ended April 4.

In total this year has seen six inflows and 13 outflows in the 19 weeks so far, according to the Prospect News analysis.

IG corporates again add cash

Among other asset classes, investment-grade corporate funds once more saw an inflow, adding $0.804 billion of cash.

That was a little lower than the previous week’s $0.997 billion which in turn followed additions of $2.010 billion, $1.535 billion and $3.346 billion.

The IG funds have now seen nine 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 gains raise the year-to-date inflow for the IG corporates to $39.83 billion from $39.03 billion, another new peak for the year so far.

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