High yield mutual funds and ETFs reported a small $0.71bn inflow (of knife catchers) last week (ending on August 13th) after four straight weeks of outflows including a record $6.7bn outflow in the prior week. As BofAML notes, the turn in flows follows a strong rebound in high yield bond prices (drop in spreads), which (before the Ukraine news) had reversed more than half of the losses incurred in July. However, European high-yield funds saw further significant outflows, $3bn more compared to $4bn last week and European equities saw massive outflows. Furthermore, modest equity inflows hide the fact that the only buyer of stocks in the US remain corporates (buybacks) as institutional sellers dominate.
US HY funds saw a small inflow (of knife catchers)...
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And given the total lack of liquidty this pressed spreads tighter on the week (until today's news)...
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As European stocks see massive outflows...
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But - once again - the only BUYER of US equities is corporates...
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As insttutional selling continues...
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Charts: BAML and Bloomberg
