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Cash outflows from high yield, ETFs resume

Daily data from EPFR Global indicate that cash is again flowing out of the high-yield corporate asset class, and that redemptions from exchange-traded funds have reappeared after a brief respite. Indeed, Tuesday’s reading is an outflow of $137 million, of which 65% is tied to ETF withdrawals, following three sessions of no ETF outflow that ended a 13-session streak of ETF outflow.

All in, the four-day reading is negative $108 million, of which roughly half is tied to ETF redemptions. If today’s muddied session sees another outflow, tomorrow’s full-week observation could be a fourth consecutive outflow following three weeks of cash withdrawals totaling $1.6 billion. The full week report is due after 4:00 p.m. EST tomorrow.

Last week’s withdrawal was $329 million, but it was $211 million of mutual fund inflows against an outflow of $540 million from ETFs. That action dragged the year-to-date reading into the red, at negative $102 million, based on $1.3 billion of mutual fund inflows wiped out by ETF redemption, according to EPFR.

Looking back at 2012, despite some outflows to close the year, there were just 14 negative readings in the year. The full-year 2012 inflow figure was $22.64 billion, with 33% tied to ETFs, versus inflows of $13.08 billion in 2011, with 42% was tied to ETFs, and $9.06 billion of inflows in 2010, of which squarely 50% was directed to ETFs. – Matt Fuller (212) 512-3294 (temporary line)