HY Bond Fund Outflows to Continue
June 30, 2009
High yield bond fund outflows are expected to continue for a second straight week, as investors exhibit a renewed caution. The funds posted outflows for the first time since March last week, ending a 14-week inflow streak, according to EPFR Global.
“There was a palpable shift in investor confidence and appetite for risk,” said Brad Durham, a managing director with EPFR. “You saw it in outflows from high yield and emerging market equity funds.” He noted that along with high yield funds, emerging market equity funds are a good reflection of a changing investor environment. “Expect another week of outflows. We would be very surprised if it swung back into inflows, just given the way the sentiment seems to be shifting.”
U.S. bond funds overall took in $1.72 billion last week, bringing year-to-date inflows to more than $29 billion. It was the 12th straight week that overall U.S. bond funds took in more than $1 billion.
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