Connect with us

Popular World News

U.S.-based high-yield junk bond funds post largest weekly outflow since October By Reuters

World's first floating farm in operation in Rotterdam By Euronews

ECONOMIC NEWS

U.S.-based high-yield junk bond funds post largest weekly outflow since October By Reuters


U.S.-based high-yield junk bond funds post largest weekly outflow since October

By Jennifer Ablan

(Reuters) – U.S.-based high-yield junk bond funds posted more than $4 billion of outflows in the week ended Wednesday, the largest weekly cash withdrawals since October 2018, according to Refinitiv’s Lipper data, triggered by an escalating trade war between China and the United States.

Investors scrambled into safer U.S.-based money-market funds, which attracted $64.66 billion in the week ended Wednesday, the fifth largest weekly inflow on record since 1992, Lipper said.

Late Sunday, China let the yuan breach the key 7-per-dollar level for the first time in more than a decade and announced it was stopping its purchases of U.S. agricultural products, halting a global rally which had pushed benchmark indexes in the United States and China up more than 20% for the year to date.

It was the latest salvo in a brewing trade-turned-currency war between the world’s two largest economies.

“Lower rates aren’t good for money market funds, but the flows this week represented a flight to safety,” said Tom Roseen, head of research services at Lipper. “Investors were just looking for a good place to hide.”

Roseen said there were “significant outflows” for equity exchange-traded funds (ETFs) this week at -$22 billion, marking their second-largest weekly outflows on record since 1996.

“Interestingly, despite the closing at 1.71% yesterday – its lowest closing value since November 4, 2016 – authorized participants and ETF investors were net redeemers of taxable bond ETFs at negative $5.7 billion, with the second-largest net redemption occurring in our government-Treasury macro-group at negative $1.6 billion,” Roseen said.

“Keep in mind that normally there is an inverse relationship between yield and price. The average government-Treasury ETF posted a 1.69% return for the fund-flows week ended August 7, 2019.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

More in ECONOMIC NEWS

To Top
error: Content is protected !!
Top