Junk funds add $197 million, inflow streak continues for third consecutive week

By Abigail W. Adams

Portland, Me., Aug. 2 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – continued a streak of inflows for the week ended Aug. 15, adding $197 million, according to fund-flow statistics generated by AMG Data Services Inc.

The week marks the third consecutive week of inflows after a choppy year that has seen outflows reach record levels.

High-yield mutual and exchange-traded funds saw inflows of $828 million for the week ended Aug. 8 and $37 million of inflows for the week ended Aug. 1.

August stands poised to be the first month in recent history to see consecutive inflows with fund flows see-sawing between small gains and large losses throughout the year.

August’s inflows broke two consecutive weeks of outflows in July, which saw $548 million of cash depart in the week ending July 25 and $260 million in the week prior.

The losses came after a sizable $1.852 billion gain during the week ending July 11. However, the sizable inflow was preceded by a sizable outflow of $1.729 billion during the week ended July 4, the third straight period of losses after $1.135 billion in the week to June 27 and $232 million before that.

The cumulative outflow for the year now totals about $18.193 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 12 inflows and 21 outflows in the 33 weeks to date in 2018, according to the Prospect News analysis.

IG corporate inflows continue

Among other asset classes, investment-grade corporate funds saw another week of solid inflows with $1.453 billion entering the space.

The inflow followed an inflow of $2.804 billion in the week ended Aug. 8, an inflow of $1.211 billion in the week ending Aug. 1 and an inflow of $1.986 billion in the week ending July 25.

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