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European high yield funds see €210M inflow of investor cash; €1.3B YTD

J.P. Morgan’s weekly analysis of European high-yield funds shows a €210 million inflow for the week ended July 24. Of that total, €16 million is attributable to ETFs. The reading for the week ended July 17 was not revised from a €189 million inflow. The provisional reading for June is a €2.4 billion outflow. That compares with a €723 million inflow in May, a €555 million inflow in April, a €579 million inflow in March, a €156 million outflow in February, and a €1.8 billion inflow in January. The latest estimate for total inflows this year through June is €1.3 billion.

The size of weekly inflows is growing, with the latest reading the largest inflow since mid-May. Nonetheless, the €475 million to have flowed into funds over the last three weeks pales into insignificance compared with the €2.4 billion that flowed out in June. However, the recent inflows have led bond managers to actively seek to put money to work, and as a result issuers have flocked to market ahead of the summer lull. According to LCD, July has so far recorded a new-issue volume of €7.43 billion, making it the second-largest monthly volume this year, behind May’s €8.95 billion total (which was the largest monthly volume ever recorded). Furthermore, the July total should increase as Cabot Financial aims to drive-by today with a £100 million ticket, while S&B Minerals should price a €275 million deal before month-end.

In the U.S., retail cash inflows to high-yield funds increased to $3.3 billion in the week ended July 24, according to Lipper, a Thomson Reuters company. This is the fourth consecutive inflow, following a $2.7 billion infusion last week, and two smaller inflows totalling $461 million in the weeks prior. This is the largest single one-week inflow of the year, and the largest since a record inflow of $4.2 billion was tracked in the week ended Oct. 26, 2011. ETF inflows represented 37% of the total this past week, or roughly $1.2 billion.

Retail-cash inflows into bank loan mutual funds and ETFs were $1.85 billion for the week ended July 24, according to Lipper FMI, a division of Thomson Reuters. That reading marks a new record for the weekly reporter sample, topping a previous high of $1.71 billion from last week, which itself bested a total of $1.55 billion for the week ended March 20.

As reported, J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, J.P. Morgan’s weekly analysis looks at around 50 funds, with total assets under management of €10 billion. Its monthly analysis takes in a larger universe of 90 funds, with €27 billion of assets under management. For a full analysis, please see “Europe receives HY fund flow calculation.” – Luke Millar