Investors pull $2bn from high yield funds as fears grow

High yield bond funds saw more than $2bn in outflows in the week to 15 June.

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Some $2.1bn was withdrawn from such funds over the week, according to EPFR Global, the second largest such outflows on record.

The outflows were exceeded only by those seen in the week to 26 May 2010, with the context of those redemptions – concerns over the Greek sovereign debt crisis – still very much a focal point of investors’ thinking this time round. Falling yields and soaring issuance have also been playing on minds, EPFR Global said.

EPFR did note, however, that outflows as a percentage of total high yield bond fund assets stood at around 1%, meaning outflows have not yet taken on the more significant proportions seen last May.

Despite such activity, flows into US bond funds continued, while US equity funds saw their highest weekly inflows for a year, though EPFR said almost all the new money flowed into a single large cap ETF.

“Actively managed funds had their worst week since last August as retail investors continue their recent exodus,” said EPFR Global research director Cameron Brandt.

Few other equity fund groups saw inflows on a geographic basis, with European equities hit by worsening sovereign debt sentiment and investors remaining cautious over emerging markets.
 

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