Junk funds see outflows of $2.36 billion for week ended Oct. 24

By Abigail W. Adams

Portland, Me., Oct. 25 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw $2.364 billion of outflows for the week ended Oct. 24, according to fund-flow statistics generated by AMG Data Services Inc.

While flows have been mixed in October, the inflows have been dwarfed by the outflows.

Funds saw an inflow of $447 million enter the space in the week ended Oct. 17.

However, funds saw an outflow of $4.928 billion for 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.

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 Sept. 26.

Funds were also mixed in September 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 $24.43 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 17 inflows and 26 outflows in the 43 weeks to date in 2018, according to the Prospect News analysis.

IG corporates see outflows

Among other asset classes, investment-grade corporate funds saw inflows of $415 million for the week ended Oct. 25, after a modest outflow the previous week.

Investment-grade funds saw an outflow of $54 million for the week ended Oct. 17 after four consecutive weeks of inflows.

Investment-grade funds saw inflows of $1.222 billion for the week ended Oct. 3, $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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