U.S. high-yield retail funds recorded outflows of $3.55 billion for the week to Feb. 16, marking a sixth straight week of heavy redemptions, according to Lipper. The latest exit followed on a $1.96 billion outflow over the previous week, which was the smallest across those six straight outflows, and it lifted the four-week rolling average to negative $3.09 billion, from negative $2.74 billion a week earlier.
Cumulative outflows for the last six weeks total $16.74 billion, or the heaviest since the six-week stretch to March 25, 2020, when $19.24 billion exited the funds as investors recoiled from the onset of the pandemic. The latest redemptions follow on a net $13.03 billion outflow last year.
Redemptions again were broad-based over the latest week, including $1.42 billion flowing out of mutual funds and $2.13 billion leaving U.S. high-yield exchange-traded funds. Both categories recorded outflows for a sixth straight week.
Assets at the weekly reporters to Lipper continued to deflate, reaching $260.3 billion at Feb. 16 ($68.2 billion at ETFs, or 26%), versus $282.7 billion at the end of the week to Jan. 5 (29% at ETFs), or the last week where funds attracted net cash.
The markets moved against that pool of assets for a seventh straight week in 2022. The negative $3.54 billion change in valuations due to market conditions for the latest week was the sharpest over that span, as well as the biggest weekly loss since that aforementioned week to March 25, 2020. The cumulative change due to market conditions in 2022 stands at negative $10.14 billion, versus a positive $14.34 billion net change for all 2021.
As the 2022 market rout intensified, the bid for LCD's 15-bond sample of liquid issues plunged 179 basis points over the latest week, to 97.25% of par, following on a decline of 103 bps over the previous week. That bid level slid lower for a seventh straight week in 2022, from 103.92 on the final reading of 2021, on Dec. 30. The latest level is the lowest since April 9, 2020, from a reading recorded just ahead of the Fed's rally-triggering move to expand its pandemic-era liquidity programs to parts of the high-yield universe.