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In This List

Retail investors pull $4B from high yield bond funds amid trade unease

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Video: The latest Capital Markets View covers the main trends in the European leveraged finance market


Retail investors pull $4B from high yield bond funds amid trade unease

U.S. corporate high-yield funds saw a $4.1 billion outflow in the week ending Aug. 7, according to Lipper weekly reporters, the biggest wave of weekly redemptions for those funds since last October.

High Yield Fund Flows US chart

A substantial amount of the loss was due to market changes, which accounted for just shy of $2.5 billion of the recorded decline.

The moving four-week average has dropped back into the negative, now hovering near $577 million worth of outflows, backtracking on the previous week’s net inflow of $595 million for the week ending July 31.

Both ETFs and mutual funds contributed to the decline, with ETFs recording a larger $2.5 billion outflow while funds saw around $1.6 billion in outflows.

Total assets in high-yield funds now total $206.7 billion, down from $213.3 billion last week. ETF assets now total $49.1 billion, down nearly $3 billion from the week prior but still making up 24% of the total market.

Year-to-date, retail funds in high-yield have recorded a net inflow of $11.1 billion. 

Risk sentiment in markets turned sour at the end of last week and remained elevated at the beginning of the week, leading to a broad selloff of risk assets in both the equity and bond markets. Rising trade tensions, volatile stocks, and uncertainty over the path of interest rates may keep high-yield bond prices under pressure in the near term.

LCD is an offering of S&P Global Market Intelligence. S&P Global Ratings is a separately managed division of S&P Global.

 

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LCD comps is an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.