Junk funds add $261 million of funds after two losing weeks

New York, May 24 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall junk market liquidity trends – gained $261 million of cash in the week to May 23, an inflow that followed two larger losses, according to fund-flow statistics generated by AMG Data Services Inc.

The previous week the funds had seen $0.542 million depart and the week before that, ended May 9, the deficit was $0.755 billion, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’s Lipper analytics division.

In the preceding weeks, the funds saw mixed inflows and outflows, adding $0.526 billion in the week ending May 2 but suffering 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 inflow, the funds have now seen three inflows and seven outflows in the past 10 weeks.

Year to date still negative

The gain in the latest week trimmed the year-to-date outflow to $15.12 billion, improved from $15.38 billion the week before, lifting it further off the year’s low point of $16.08 billion recorded in the week ended April 4.

In total this year has seen seven inflows and 14 outflows in the 19 weeks so far, according to the Prospect News analysis.

IG corporates add more cash

Among other asset classes, investment-grade corporate funds once more benefited from an inflow, gaining $2.529 billion in the latest week.

That followed inflows of $3.069 billion, $0.804 billion and $0.997 billion in the preceding weeks.

The IG funds continue to have 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 addition of cash raises the year-to-date inflow for the IG corporates to $45.43 billion from $42.90 billion the week prior, another new peak for the year so far.

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