No festive cheer for credit flows
- Going into the festive season did not bring any respite for credit outflows. Both
high grade and high yield funds kept on the same trend, as credit outflows continued for
a third week, with an amplitude close to those of the previous weeks.
- High yield had a third successive week of outflows, dragging the year-to-date figure
close to -$3bn. High grade fund flows were also negative over the week, and actually
intensified w-o-w. This was the biggest outflow in 12 weeks. Year-to-date cumulative
flows are now almost down to zero.
- Euro-domiciled government bond funds reacted positively post the Fed hike and
recorded their first positive week in December. Looking at equities, the asset class
managed to maintain an inflow for the 12th week in a row, driving the year-to-date
figure over the $120bn mark.
- EPFR monthly data have been released. For the month of November, yield was in
vogue and both high yield and equities led the flows. High yield saw inflows of more
than +$2.8bn, marking a significant increase compared to October. In equites, monthly
data verify the strength seen in weekly figures (+$8.3bn in November), with an
impressive record of all months in 2015 having had positive inflows.
However, monthly data for investment grade paints a dim picture. November was the sixth
negative month of flows in a row (-$1.9bn). But outflows have declined to the smallest
since the start of the trend in June. The same for government bond funds, as they suffered
significant outflows in November (-$3.7bn) -- the largest since the start of 2H.
All in all, it seems that credit funds have seen improvement trends over the past two
months compared to Q3.