Friday, October 15, 2010

Weekly Fund Flows

We witnessed very strong inflows into High Grade Bonds for a total of $1.7BN.  This is a significant pick-up from the previous week which was $50MM, further highlighting the volatility of these reports. High Yield (a.k.a. Good Junk) chalked up inflows of $240MM.  Bank Loans registered inflows of $308MM versus $177MM.  Emerging Market Debt continues to gather very large inflows, $433MM or 2.6% of assets, the largest amount by volume and percent of assets since April 2010.  Money Markets puked out $1.7BN in outflows, while Equity Funds attracted inflows of $5.2BN.

Its all about yield.  Folks are searching for it wherever they can.  This, historically, has not worked out well as the yield quest typically leads to looser underwriting and covenants.

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About Me

A student of the markets that has held portfolio management, analysis and trading positions for over 15 years.