Lipper sees $355 million junk funds outflow on week, but EPFR says funds up $152 million

By Paul Deckelman

New York, Dec. 28 - High-yield mutual funds and exchange-traded funds saw their second consecutive weekly outflow, market participants familiar with the fund-flow statistics generated by AMG Data Services, Inc. said Friday.

They heard that in the week ended Wednesday, Arcata, Calif.-based AMG - a unit of the Lipper analytics division of ThomsonReuters Corp. - was reporting that in the latest week, $354.9 million more had left those funds than came into them during that time.

It was the second consecutive outflow, following the similarly sized $345 million cash loss seen the previous week, ended Dec. 19. Those two outflows, totaling nearly $700 million, followed three consecutive weeks of inflows totaling $1,176,000,000, which ran through the week ended Dec. 12, according to a Prospect News analysis of the figures.

On a year-to-date basis, cumulative net inflows have totaled around $28 billion, and inflows have now been recorded in 39 weeks this year, against outflows in 13 weeks, according to the analysis.

The flow of fresh cash into or out of the funds is considered to be a generally reliable barometer of overall junk market liquidity trends.

However, another fund-tracking service, Cambridge, Mass.-based EPFR Global, said that in the latest week, $152 million more came into those funds than left them.

It was a relatively rare case in which the Lipper numbers and those of EPFR diverged. While the actual numbers reported by the two services usually differ markedly due to the difference in their respective methodologies - EPFR includes non-U.S. domiciled junk funds in the numbers it reports while Lipper focuses on domestic funds - they generally point in the same direction week to week.

The inflow seen by EPFR in the latest week followed the previous week's $281 million outflow. As was the case with Lipper, EPFR's outflow followed three consecutive weeks of inflows, which totaled about $4.55 billion.

On a year-to-date basis, EPFR has seen about $72.3 billion of net inflows. According to a Prospect News analysis of the data, there have now been 42weekly inflows against 10 weekly outflows.

Cumulative fund-flow estimates, whether from EPFR or from AMG/Lipper, may be revised upward or downward or be rounded off and could include unannounced revisions and adjustments to figures from prior weeks.

The continued flow of fresh cash into junk - and the mutual funds and ETFs represent but a small, though very observable and quantifiable percentage of the total amount of money coming in - has been seen by analysts as a key element behind the high-yield secondary market's strong performance this year versus other fixed-income asset classes, and its record active new-deal pace, which surged past 2011's year-to-date totals several months ago.

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