Junk mutual funds, ETFs see record $3.22 billion outflow in latest week

By Abigail W. Adams

Portland, Me., June 6 – High-yield mutual funds and exchange-traded funds – considered a reliable barometer of overall liquidity trends in the junk market – broke a recently set record for largest outflow year-to-date with $3.22 billion leaving the space for the week ended Wednesday, according to fund-flow statistics generated by AMG Data Services Inc.

The record amount was the second consecutive billion dollar plus outflow and contributed to a growing trend of money leaving the space.

Funds saw an outflow of $1.27 billion for the week ended May 29.

While funds saw 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 15.

Of the seven outflows recorded in 2019, five of them have occurred since late April.

The $2.57 billion outflow was preceded by an outflow of $212 million for the week ended May 8.

Funds saw a modest inflow of $21 million for the week ended May 1.

The modest inflow was preceded by an outflow of $521 million for the week ended April 24 – the first outflow in seven weeks.

Prior to the week ended April 24, the last outflow was for the week ended March 6 when $1.91 billion left the space.

The March 6 outflow broke a streak of six consecutive inflows, which included the record-setting inflow of $3.86 billion for the week ended Feb. 6 – the largest inflow the space had seen since December 2016.

While fund flows in 2019 are still net positive, the recent outflows continue to chip into the cumulative inflow.

The cumulative inflow is now $7.22 billion in the 22 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 five inflows and five outflows.

There have been 15 inflows and seven outflows in the 22 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 $924 million for the week ended Wednesday.

Funds saw a record-setting outflow of $5.1 billion for the week ended May 29 – the largest since 2015, according to a market source.

The outflow was the second consecutive outflow for high-grade funds with $756 million leaving the space for the week ended May 22.

Until recently, high-grade funds have seen a steady streak of inflows.

Funds saw an inflow of $2.18 billion for the week ended May 15, a substantial inflow of $3.33 billion for the week ended May 8, a modest inflow of $375 million for the week ended May 1 and a massive inflow of $5.86 billion for the week ended April 24.

There was an inflow of $2.31 billion for the week ended April 17, $2.9 billion for the week ended April 3, $2.75 billion for the week ended March 27 and $5.14 billion for the week ended March 20.

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