U.S.-based investment-grade corporate bond funds see 14th week of inflows

BlueMountain names slate for PG&E board

(Reuters) – Investors gravitated toward the higher-quality spectrum of the credit markets this week, as U.S.-based investment-grade corporate bond funds attracted about $374.5 million in net cash, their 14th consecutive week of inflows.

According to Refinitiv’s Lipper research data on Thursday, investors sent roughly $16 billion in net cash to U.S. money-market funds for the week ended Wednesday, following their previous week’s inflows of $4.26 billion.

U.S.-based equity mutual funds, however, had another rough week.

Investors pulled $5.5 billion from U.S.-based equity mutual funds in the week ended Wednesday, Lipper data show, while equity exchange-traded funds garnered $3.7 billion.

“Despite the S&P 500 setting three record closes during the fund-flows week, investors remained on the equity sidelines after learning about disappointing Q1 revenue growth from stalwart Alphabet,” said Tom Roseen, head of research services at Lipper.

“There was a split once again between mom-and-pop investors and authorized participants. Equity mutual funds witnessed outflows of $5.5 billion, while equity ETFs took in $3.7 billion during the fund flows week.”

U.S.-based taxable exchange-traded funds posted cash withdrawals for the week, with investors withdrawing $700 million in net cash.

“While investors were keeping a keen eye on the FOMC (Federal Open Market Committee) meeting, which concluded on Wednesday on a more hawkish note than some anticipated, taxable-fixed income mutual funds took in small amounts of net new money – $348 million-plus, with ETF investors … withdrawing $700 million,” Roseen said.

“Interestingly, though, both investors types were net purchasers of municipal bond funds, injecting $877 million into conventional open-end funds and $314 million for ETFs, respectively,” Roseen said. “For the week, the average municipal bond fund returned 0.51 percent.”

Reporting by Jennifer Ablan; Editing by James Dalgleish

Source link

Huge inflows to U.S. high-yield bond, investment-grade debt funds

BlueMountain names slate for PG&E board

(Reuters) – Investors’ appetite for risk-taking was strong in the latest week, as U.S.-based high-yield junk bond funds attracted more than $2 billion in the week ended Wednesday, marking the group’s fourth consecutive week of inflows, according to Refinitiv’s Lipper research service data.

Additionally, U.S.-based investment-grade corporate bond funds attracted over $2.9 billion in the period, extending their weekly inflow streak since early January, Lipper said.

Investors’ appetite for risk assets and their hunt for yield intensified after the Federal Reserve on March 20 brought its three-year drive to tighten monetary policy to an abrupt end. The Fed abandoned projections for any interest rate hikes this year amid signs of an economic slowdown, and said it would halt the steady decline of its balance sheet in September.

“Bond funds in general took off … when the Federal Reserve announced that it was taking its foot off the brakes – no more rate hikes until inflation warrants it and the balance sheet reduction program would be ending,” said Pat Keon, senior research analyst at Lipper.

In the fourth quarter, high-yield bond funds were the worst performing fixed-income funds peer group – down 4.54% – and the best in the first quarter – up 6.56%, Keon noted.

“The flip in investor sentiment regarding high-yield funds can be seen in the group’s fund-flows results, as they had net outflows of $20.7 billion in Q4 – second worst quarterly net outflow ever – and they have taken in $14.3 billion in net new money in Q1 – the second best quarterly net inflow ever,” Keon said.

Leveraged loan funds have been in a prolonged slump, however. Keon said they have had 20 straight weeks of outflows during which time they have seen over $24 billion in cash withdrawals. “Unlike the rest of the fixed-income universe, it is a negative for loan funds when the Fed holds rates static – or decreases rates,” Keon said. “This is because loans have floating rates that benefit from interest rate hikes.”

U.S.-based stock funds also posted another rough week. U.S. equity funds and domestic equity funds saw cash withdrawals of $3.9 billion and $3.8 billion, respectively. In the previous week, U.S. equity funds and domestic equity funds posted outflows of over $11 billion and $10.23 billion, respectively.

Reporting by Jennifer Ablan; Editing by Dan Grebler and Chris Reese

Source link

Equity funds see biggest weekly inflows in a year: BAML

BlueMountain names slate for PG&E board

LONDON (Reuters) – Investors plowed $14.2 billion into global equity funds this week, the largest amount in a year as investors jumped on to 2019’s stock market rally, Bank of America Merrill Lynch said on Friday, citing flow data provider EPFR.

An index of global stocks is up more than 16 percent since the end of 2018 as falling market volatility and a renewed dovishness from global central banks, led by the U.S. Federal Reserve has boosted risk appetite across the board.

BAML said most of the inflows went into exchange traded funds while mutual funds saw net outflows.

U.S. equity funds were the biggest beneficiaries with net inflows of $25.5 billion while emerging markets saw net outflows.

European funds also saw $4.6 billion of outflows after the European Central Bank slashed its growth forecasts and signaled a cautious economic outlook at its latest policy meeting.

The appetite for risk spilled over into bond markets as well with investment grade debt notching up the eighth consecutive week of inflows.

Reporting by Saikat Chatterjee; Editing by Tommy Wilkes

Source link