Junk mutual funds, ETFs lose $4.07 billion for week ended Aug. 7

By Abigail W. Adams

Portland, Me., Aug. 8 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw the largest outflow this year to date with $4.07 billion leaving the space for the week ended Wednesday, according to fund-flow statistics generated by AMG Data Services Inc.

It was the second consecutive week money has left the space with a modest $115 million outflow for the week ended July 31.

The recent outflow was the first time outflows have topped $4 billion in 2019 and only the second time outflows have exceeded $3 billion.

The previously largest outflow of 2019 was the $3.22 billion that left the space in the week ended June 5.

Prior to the past two weeks, funds had seen a seven-week stretch of consecutive inflows.

Funds saw $1.31 billion enter the space for the week ended July 24, $573 million for the week ended July 17, $619 million for the week ended July 10 and $802 million for the week ended July 3.

Funds saw a substantial inflow of $3.09 billion for the week ended June 26, marking the third time inflows have topped $3 billion in 2019.

Prior to that, funds saw an inflow of $602 million for the week of June 19 and an inflow of $1.72 billion for the week ended June 12.

Seven of the nine outflows in 2019 have occurred since late April.

Prior to the $3.22 billion that left the space for the week ended June 5, there was a substantial outflow of $1.27 billion for the week ended May 29.

While there was a modest inflow of $4 million for the week ended May 22, the inflow was preceded by what was previously the largest outflow of 2019 – $2.57 billion left the space for the week ended May 1.

Cumulative fund flows in 2019 now stand at $11.74 billion for the 31 weeks thus far, 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, funds have seen six inflows and four outflows.

There have been 22 inflows and nine outflows in the 31 weeks of 2019, according to the Prospect News analysis.

IG corporates see inflows

Among other asset classes, investment-grade corporate funds saw an inflow of $2.8 billion for the week ended Wednesday.

The inflow was preceded by a modest outflow of $62 million for the week ended July 31.

Prior to the outflow, high-grade funds saw an eight-week stretch of inflows.

Funds saw an inflow of $2.48 billion for the week ended July 24 and a substantial inflow of $3.65 billion for the week ended July 17.

Funds saw inflows of $570 million for the week ended July 10, $1.76 billion for the week ended July 3, $3.24 billion for the week ended June 26, $3.65 billion for the week ended June 19, $4.02 billion for the week ended June 12 and $924 million entering the space for the week ended June 5.

Prior to the streak of inflows, high-grade funds saw a record-setting outflow of $5.1 billion that left the space for the week ended May 29.

The outflow was the largest since 2015, according to a market source.

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