US high-yield funds post $2.236B outflow, largest in 6 weeks

U.S. high-yield retail funds reported outflows totaling $2.236 billion for the week ended Jan. 12, which snapped a string of three consecutive weekly inflows, according to Lipper. The four-week rolling average held in positive territory, at $416 million, down from positive averages of $925 million for the four weeks to Jan. 5 and $1.09 billion for the period to Dec. 29, 2021.

The latest outflow was the largest in six weeks. It reflected outflows of $88.5 million from mutual funds and $2.15 billion from U.S. high-yield exchange-traded funds. In 2021, the overall $13.03 billion of high-yield fund outflows reflected $13.87 billion exiting mutual funds and a net $841.5 million moving into ETFs.

Assets at the weekly reporters to Lipper totaled $280 billion as of Jan. 12, $79.1 billion, or 28%, of which is at ETFs. The markets moved against that pool of assets for a second straight week to start 2022. The $472 million decrease in asset values due to market conditions for the latest week followed on a $479 million decrease over the previous week.

For reference, the price for the S&P U.S. High Yield Corporate Bond Index was 102.95% or par at the Jan. 12 close, down from 103.40 a week earlier. The index price touched 102.49 on Jan. 10, a low since early November 2020. The yield to worst and option-adjusted spread for the index closed at 4.47% and T+301 on Jan. 12, versus 4.40% and T+298 a week earlier.