Junk funds lose $628 million for week ended Jan. 2; high grade funds lose $4.52 billion

By Abigail W. Adams

Portland, Me., Jan. 4 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw outflows of $628 million for the week ended Jan. 2, according to fund-flow statistics generated by AMG Data Services Inc.

The outflow followed a substantial outflow of $3.53 billion for the week ended Dec. 26.

Junk funds saw $789 million leave the space for the week ended Dec. 19, $2.06 billion leave the space for the week ended Dec. 12, $829 million leave the space in the week ended Dec. 6, $1.2 billion leave the space in the week ended Nov. 28 and $2.19 billion leave the space for the week ended Nov. 21.

While the string of outflows was preceded by two consecutive weeks of inflows, the fourth quarter of 2018 was marked by heavy outflows.

Funds saw $487 million enter the space in the week ended Nov. 14 and added $1.04 billion in cash for the week ended Nov. 7 – the first billion-dollar inflow since the week ended Oct. 3.

Funds saw outflows of $1.04 billion in the week ended Oct. 31 and outflows of $2.36 billion for the week ended Oct. 24.

While funds saw inflows of $447 million for the week ended Oct. 17, the week was preceded by an outflow of $4.93 billion for the week ended Oct. 10.

The $4.93 billion outflow was the third largest outflow on record and the second largest outflow of 2018.

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.

The year marked a record for outflows with the cumulative outflow for 2018 totaling $36.5 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 two inflow and eight outflows.

There have been 19 inflows and 33 outflows in the 52 weeks to date in 2018 and one outflow to mark the first week of 2019, according to the Prospect News analysis.

IG corporates see outflows

Among other asset classes, investment-grade corporate funds saw a substantial outflow of $4.517 billion for the week ended Jan. 2.

The funds saw outflows of $3.93 billion for the week ended Dec. 19, eclipsing the previous week’s outflow which was the largest since the last week of October.

IG funds saw $3.72 billion leave the space for the week ended Dec. 12, $1.27 billion leaving the space in the week ended Dec. 6 and $1.69 billion leaving in the week ended Nov. 28.

The outflows were preceded by a three-weak streak of inflows.

Funds added $287 million for the week ended Nov. 21, $755 million for the week ended Nov. 14 and $1.85 billion for the week ended Nov. 7.

Funds saw outflows of $3.75 billion for the week ended Oct. 31.

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