U.S. high-yield funds recorded a net inflow of $883 million in the week ended Jan. 27, marking the first positive reading in four weeks. Still, the inflow barely dents last week outflow of $2 billion, not to mention the combined outflows of $4.9 billion over the prior three weeks.
The net-positive reading was all tied to exchange-traded funds, however, as mutual funds netted an outflow of $661 million against ETF inflows of $1.5 billion. This is the first ETF-inflow inverse reading in five weeks; all three prior outflow were both ETF and mutual fund related.
Regardless of what that might say about market-timing, hedging, and fast-money activity, it’s a net inflow that draws down the trailing-four-week average to negative $1 billion per week, from negative $1.2 billion last week. Recall that prior to the December outflow streak, the trailing-four-week observation was positive $231 million in mid-November.
With steady outflows for the new year beyond this past week’s inflow, the year-to-date outflow total is now $4.1 billion, with 29% related to the ETF segment. The full-year 2015 reading was deeply in the red, at negative $7.1 billion. The full-year reading was negative $7.7 billion for mutual funds against positive $686 million for ETFs, for a roughly 10% inverse reading.
Alongside this past week’s inflow and stronger momentum in the secondary market, the change due to market conditions over the past week was the positive $3.1 billion, the strongest in 67 weeks, or since an increase of equally $3.1 billion in the week ended Dec. 10, 2014. This week’s expansion is nearly a 2% gain against total assets, which were $172.1 billion at the end of the observation period.
At present, the ETF segment accounts for $32.8 billion of total assets, or roughly 19% of the sum. — Matt Fuller
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