US high-yield retail funds reported a net outflow of $3 billion for the week through Sept. 28, as the high-yield marketplace also suffered the worst market-based losses since mid-June, according to data from Lipper. The year-to-date net outflow increased to $41.9 billion, including a net $15.8 billion pulled from the funds over the last six weeks alone.
The four-week moving average has run in negative territory for six straight weeks. That metric was negative $2.79 billion through Sept. 14, marking the deepest reading in the red since February. It moderated to negative $1.55 billion through the latest week, from negative $2.06 billion through the previous week, as the largest outflows over the last six weeks (recorded over the final two weeks of August) exited the rolling average, and reflecting a modest net inflow for the week to Sept. 14.
The latest redemptions were led by a $2.16 billion outflow from high-yield ETFs, which have seen $19.6 billion of net outflows in the year to date. Investors withdrew $841 million from mutual funds for the week, in the context of $22.3 billion of net outflows from the category so far this year.
The value of the assets at the weekly reporters to Lipper fell to $208.9 billion as of Sept. 28, down from $217.6 billion a week earlier, and versus a third-quarter high at $239.9 billion on Aug. 17. Fund assets haven't been marked lower since April 2020, per Lipper.
That dramatic decline over the last six weeks reflects a potent mix of fund outflows and heavy market-based losses. The change in the value of the fund assets just due to market conditions was negative $5.7 billion for the latest week, part of a cumulative $14.9 billion of losses over the latest six weeks. Market-based losses now amount to $35.4 billion for the year, after $14.3 billion of market-based gains for all last year.
For reference, the price for the S&P US High Yield Corporate Bond Index was 84.58 as of the Sept. 28 close, down 264 bps week over week. The 84.54 reading on Sept. 27 was a low since March 2020. The index yield to worst reached a multi-year high at 9.33%, up 78 bps week-over-week and versus 5.94% at the end of March, and 4.22% at the start of the year.
This article originally appeared on PitchBook News