U.S.-based junk bond funds see $2.6 billion in weekly outflows

[June 12, 2015]  By Jennifer Ablan and David Gaffen

NEW YORK (Reuters) - Investors in U.S.-based funds yanked $2.6 billion from high-yield "junk" portfolios in the week ended June 10, the most in five weeks, data from Thomson Reuters' Lipper service showed on Thursday.

The cash withdrawals stemmed from exchange-traded-fund investors pulling capital from the iShares iBoxx $ High Yield Corporate Bond Fund, $1.06 billion, and the SPDR Barclays High Yield Bond ETF, $762 million, said Jeff Tjornehoj, head of Americas research at Lipper.

"High-yield spreads backed up 20 basis points this week, erasing the April-May rally and that spooked investors," Tjornehoj said. After their worst two-week performance since March, taxable bond mutual funds saw outflows of $653 million, just the second week investors have pulled money from them this year, Tjornehoj added.

Investors in U.S.-based funds pulled another $88 million from international and global debt funds in the week ended June 10, after cash withdrawals of $257 million in the week ended June 3, their second-biggest outflow this year, Lipper said.
 

Prices on German Bunds have been falling and their yields rising since hitting a low on 10-year Bund yields of 0.049 percent on April 17. Thursday, 10-year German Bund yields were trading around 0.89 percent.

Including ETF activity, equity funds reported net cash inflows totaling $2.8 billion in the week ended June 10, with domestic funds reporting net outflows of $62 million and non-domestic funds reporting net inflows of $2.861 billion, Lipper said.

Excluding ETF activity, equity funds reported net cash inflows totaling $850 million with domestic funds reporting net outflows of $805 million and non-domestic funds reporting net inflows totaling $1.655 billion, Lipper added.

The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions):
 

Sector Flow Chg % Assets ($Bil) Count

($Bil) Assets

All Equity Funds 2.800 0.05 5,421.941 11,709

Domestic Equities -0.062 -0.00 3,874.887 8,410

Non-Domestic 2.861 0.18 1,547.053 3,299

Equities

All Taxable Bond -2.643 -0.11 2,341.925 6,061

Funds

All Money Market -7.230 -0.32 2,282.935 1,276

Funds

All Municipal -0.412 -0.12 344.979 1,491

Bond Funds

(Reporting By Jennifer Ablan and David Gaffen; Editing by Tom Brown)

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