After a record-setting outflow, junk funds see inflows of $447 million

By Abigail W. Adams

Portland, Me., Oct. 18 – After high-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw a record-setting outflow in the previous week, $447 million entered the space in the week ended Oct. 17, according to fund-flow statistics generated by AMG Data Services Inc.

The inflow dwarfed in comparison to the outflow of $4.928 billion seen in the week ended Oct. 10, which was the third largest outflow on record and the second largest outflow of 2018.

The largest weekly outflow on record is $7.1 billion, seen in the week to Aug. 6, 2014, a market source said.

The second largest outflow on record and the largest of 2018 was the $6.3 billion that left the space in the week ended Feb. 14, 2018.

Prior to the record-setting outflow, funds saw inflows of $1.389 billion for the week ended Oct. 3, which pared losses from the $1.569 billion outflow in the week ended Wednesday, Sept. 26.

Fund flows have seesawed between gains and losses throughout September and October after a streak of consecutive inflows in August.

Dedicated high-yield bond funds saw $967 million of inflows in the week ended Sept. 19 after two consecutive weeks of outflows.

Funds saw $862 million in cash leave the space in the week ended Sept. 12 and $639 million leave the space in the week ended Sept. 5.

Prior to the outflows in early September, funds saw five consecutive weeks of inflows.

The cumulative outflow for the year now totals $22.07 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 six inflows and four outflows.

There have been 17 inflows and 25 outflows in the 42 weeks to date in 2018, according to the Prospect News analysis.

IG corporates see outflows

Among other asset classes, investment-grade corporate funds saw a modest outflow of $54 million for the week ended Oct. 17.

Investment-grade funds saw inflows of $1.222 billion for the week ended Oct. 3, the fourth consecutive week of inflows since funds saw their last outflow.

IG funds saw inflows of $1.781 billion for the week ended Sept. 27, $1.02 billion for the week ended Sept. 19, and $3.217 billion for the week ended Sept. 12.

IG funds saw an outflow of $297 million for the week ended Sept. 5.

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