November 16, 2017 / 11:38 PM / a year ago

UPDATE 2-U.S. junk bond funds post 4th-biggest week of outflows ever -Lipper

 (Adds details on mutual funds and ETFs, table)
    By Trevor Hunnicutt
    NEW YORK, Nov 16 (Reuters) - U.S. fund investors walloped
high-yield funds with their biggest week of withdrawals since
March, Lipper data showed on Thursday.
    The junk bond mutual funds and exchange-traded funds (ETFs)
posted $4.4 billion in net withdrawals during the week ended
Nov. 15, the fourth-largest weekly outflow on record dating back
to 1992.
    Several concerns weighed on high-yield markets during the
week, but the extensive withdrawals signal that investor
sentiment after a strong year of performance may have been chief
among them. Three high-yield bond deals have also been pulled
from the market in the space of a week in the face of investor
    The U.S.-listed, $11.6 billion SPDR Bloomberg Barclays High
Yield Bond ETF posted negative performance in 14 of the
last 19 days. Over the last month it delivered a negative 0.57
percent total return, with price declines cushioned by the plush
yield it pays. 
    The ETF posted $947 million in withdrawals during the week,
Lipper estimates.
    Elevated high-yield outflows are somewhat concerning, said
Pat Keon, senior analyst for the Lipper research unit of Thomson
Reuters, citing what he called the absence of an obvious
    "I wouldn't expect anything like I saw," he said.
    Bank of America Corp analysts said in a Nov. 10 note
that high-yield volatility has been "driven primarily by a
confluence of several meaningful and yet only loosely related
events," including the potential for U.S. tax reform to be
    Investors' sour temper dragged down sales for bonds overall,
despite that category's resilience this year. 
    Taxable bond fund outflows were $1.9 billion for the week,
marking the category's first withdrawals since July, Lipper
said. The funds remain on course for their third-best year of
flows on record.
    Stock fund flows weakened, too, with $240 million in
outflows marking the first week of withdrawals in six. Domestic
equity outflows more than offset inflows for their counterparts
focused abroad, according to Lipper.
    Within sectors, oil price declines over concerns about
growth in U.S. production and inventories hobbled energy firms.
Stock funds focused on that sector recorded $302 million in
outflows, the most since September. But technology-sector funds,
buoyed by strong third-quarter corporate earnings, attracted
$965 million in their largest inflows since the same month.
    Riskier stocks outside the United States retained their
appeal. Emerging-markets equity funds raked in a tenth straight
week of cash and Japanese stocks snapped up a sixth consecutive
week of net inflows.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -0.240    -0.00     6,494.732  12,126
 Domestic Equities         -2.352    -0.05     4,442.491  8,652
 Non-Domestic Equities     2.112     0.10      2,052.240  3,474
 All Taxable Bond Funds    -1.924    -0.07     2,587.602  6,033
 All Money Market Funds    2.675     0.10      2,592.988  1,047
 All Municipal Bond Funds  0.418     0.10      400.887    1,476

 (Reporting by Trevor Hunnicutt; Editing by Tom Brown and
Matthew Lewis)
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