News Digest:

Led by the market sell-off, the high-yield bond funds in the US saw withdrawals to the tune of $3.73 billion, making it the third such instance in the past four weeks. The funds had reported a $703 million inflow a week ago, but with the latest withdrawals, the four-week rolling average moved into a negative $1.25 billion, as against $288 million a week ago.

For the year till date, these funds have set a net $4.15 billion of investor assets, with withdrawals over four weeks and three positive readings. This comes on top of nearly $30 billion in 2022 and $4 billion 2021 in outflows. In 2020, the funds saw inflows of $41 billion, says a published report.

Takeaway:

Elsewhere, a combination of investor withdrawals and lower markets caused the biggest weekly drop in the value of the funds’ total net assets since September 2022. These were valued at $239.3 billion as on February 5, down $6.5 billion week-over week and versus the $248 billion high that it recorded on January 18, the highest thus far in 2023.

End Notes

Source: https://pitchbook.com/news/articles/us-high-yield-bond-funds-see-373b-withdrawal-as-rates-swell