Junk funds lose $862 million, wiping out gains in August

By Abigail W. Adams

Portland, Me., Sept. 13 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw outflows of $862 million in the week ended Sept. 12, according to fund-flow statistics generated by AMG Data Services Inc.

The outflow is the second consecutive week of cash leaving the space after a streak of five consecutive inflows.

Combined with the $639 million in cash that left the space in the week ended Sept. 5, outflows over the past two weeks have more than wiped out the gains seen in August.

August marked the first month of the year where cash has continually entered the space.

High-yield mutual and exchange-traded funds saw inflows of $97 million for the week ended Aug. 29, $344 million for the week ended Aug. 22, $197 million for the week ended Aug. 15 and $828 million for the week ended Aug. 8.

Funds also rounded out July with an inflow of $37 million for the week ended Aug. 1.

While the streak of inflows whittled down the record level of outflows seen in 2018, outflows have now returned to their pre-August level.

The cumulative outflow for the year now totals $18.38 billion, according to a Prospect News analysis of the reports by the Arcata, Calif.-based unit of Thomson Reuters Corp.’s Lipper analytics division.

For the past 10 weeks, the funds have seen five inflows and five outflows.

There have been 14 inflows and 23 outflows in the 37 weeks to date in 2018, according to the Prospect News analysis.

IG corporates see inflows

Among other asset classes, investment-grade corporate funds saw their largest inflow in recent history after marking their first outflow.

Investment-grade funds saw inflows of $3.217 billion for the week ended Sept. 12. Funds saw $297 million leaving the space for the week ended Sept. 5.

Investment-grade funds have seen healthy inflows for the past several weeks. Funds saw $2.253 billion enter the space in the week ended Aug. 29, $2.678 billion in the week ended Aug. 22, $1.453 billion in the week ended Aug. 15 and $2.804 billion in the week ended Aug. 8.

Funds also saw an inflow of $1.211 billion in the week ended Aug. 1 and an inflow of $1.986 billion in the week ended July 25.

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