Junk funds see outflows of $1.043 billion; second consecutive week of billion-dollar outflows

By Abigail W. Adams

Portland, Me., Nov. 1 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – saw $1.043 billion in outflows for the week ended Oct. 31, according to fund-flow statistics generated by AMG Data Services Inc.

The week marked the second consecutive week of outflows and the third billion-dollar outflow in October.

Funds saw $2.364 billion of outflows 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 $4.928 billion for the week ended Oct. 10.

The $4.928 billion outflow 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.

While funds have been mixed in September and October, inflows have been dwarfed by the outflows.

The cumulative outflow for the year now totals $25.473 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 four inflows and six outflows.

There have been 17 inflows and 27 outflows in the 44 weeks to date in 2018, according to the Prospect News analysis.

IG corporates see billion-dollar outflow

Among other asset classes, investment-grade corporate funds saw outflows of $3.753 billion for the week ended Oct. 31, the largest in recent history.

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

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