High-yield investors resumed pulling money out of the speculative-grade markets after two weeks of inflows, according to the latest data, and the even distribution of the withdrawal across funds suggests the $383.6 million outflow AMG reported was not a fluke. "Flows can be skewed by fund specific flows and that is not the case. If it's across the board, it definitely [reflects a general attitude] toward the asset class," explained Chris Garman, head of high-yield strategy at Merrill Lynch in New York.
Garman noted two thirds of funds reported outflows, adding inflows into other asset classes such as equities suggest high yield funds are having an increasingly difficult time competing for capital amid expectations of credit deterioration and concerns about rising rates. And the numbers back this up: as of last week, high yield is the asset class with the largest amount of withdrawals for the year, with $8.3 billion of outflows.
