Cashflows for U.S. high-yield bond funds turned positive in the week ended Sept. 9, with a net infusion of $186 million, versus outflows of $227 million last week and a larger redemption of $1.6 billion two weeks ago. It’s only the second small inflow over the past seven weeks, according to Lipper.
However, the net-positive figure for a second consecutive week is based on an inverse dynamic of high yield bond mutual fund outflows against inflows to the ETF space. In the latest reading, there was a redemption of $160 million from mutual funds filled in and then overflowed by an inflow of $346 million to ETFs. Last week was similar, although ETFs didn’t outweigh, at $487 million on top of the outflow of $714 million from mutual funds.
Regardless of what that might say about market-timing, hedging strategies, and fast-money investors, it’s a net inflow week that moderates the trailing-four-week average to negative $383 million this past week, from negative $733 million last week and negative $976 million two weeks ago.
The full-year reading remains in the red, at negative $3.1 billion, with 29% of that ETF-related. Last year, after 36 weeks, there was a net outflow of $2.5 billion, with a whopping 68% tied to ETF redemptions. Recall that included the all-time record $7.1 billion outflow in the week ended Aug. 6, 2014.
The change due to market conditions last week was positive for the second consecutive week, at $1 billion. That’s almost 0.6% against total assets, which were $191.2 billion at the end of the observation period. ETFs account for $35 billion of total assets, or roughly 18% of the sum. – Matt Fuller