High-yield funds lose $0.54 billion in second consecutive outflow

New York, May 17 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – saw outflows for a second consecutive week, seeing $0.542 million exit in the week to May 16, according to fund-flow statistics generated by AMG Data Services Inc.

The loss followed an outflow of $0.755 billion in the previous week, ending May 9, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’s Lipper analytics division.

Before that the funds had seen several weeks of mixed inflows and outflows, adding $0.526 billion in the week ending May 2, seeing a large $2.489 billion loss the week before that and an even larger $2.971 billion inflow in the April 18 week.

The April 11 week saw a gain of $989 million which ended three weeks 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 outflow, the funds have now seen four inflows and six outflows in the past 10 weeks, the same pattern as the week before.

Year to date still negative

The most recent outflow again widened the year-to-date deficit, which is now $15.38 billion, widened from $14.84 billion the previous week although it remains above the year’s low point of $16.08 billion recorded in the week ended April 4.

In total this year has seen six inflows and 14 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 again saw an inflow, adding $3.069 billion.

That followed an inflow of $0.804 billion the week before and $0.997 billion before that.

The IG funds have now seen 10 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 $42.90 billion from $39.83 billion, another new peak for the year so far.

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