European high yield bond funds see €222M investor cash inflow

J.P. Morgan’s weekly analysis of European high-yield funds shows a €222 million inflow for the week ended Jan. 15. This includes net inflows for ETFs and short-duration funds of €51 million and €58 million, respectively. The latest reading is the nineteenth consecutive weekly inflow. The reading for the week ended Jan. 8 is revised from a €337 million inflow to a €342 million inflow.

The provisional reading for December is a €1.37 billion inflow, meaning the provisional 2013 inflow is €8.22 billion. That compares to an inflow of €7.2 billion for 2012.

Bankers continue to stress that ongoing large inflows are the bedrock for sustained strong levels of supply, as the high-yield pipeline begins to grow. While the market has hosted €2.87 billion of paper already this year, this has nearly all come from fallen angels or market stalwarts. Supply of debut, single-B deals is set to begin however, following launches from French autoparts supplier Autodistribution and Polish mobile operator Play. European accounts looking for dollar assets will also see supply from Puma Energy and North Atlantic Drilling.

In the U.S., retail cash inflows from high-yield totalled $65 million for the week ended Jan. 15, according to Lipper, a division of Thomson Reuters. However the small, net positive reading was based on a $140 million inflow to mutual funds nearly erased by an outflow of $75 million from the ETF segment. Likewise, the year-to-date net inflow is $64 million, based on $407 million of mutual fund inflow nearly erased by $343 million of redemptions from ETFs.

Meanwhile, retail cash inflows to bank loan mutual funds and exchange-traded funds totalled $1.05 billion for the week ended Jan. 15, according to Lipper. That is the highest inflow in 17 weeks. The net inflow streak was extended to 83 weeks, with a total inflow of $61.8 billion over that span. The last net outflow was recorded in June 2012.

As reported, J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, J.P. Morgan’s weekly analysis looks at around 50 funds, with total assets under management of €10 billion. Its monthly analysis takes in a larger universe of 90 funds, with €27 billion of assets under management.

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