High Grade Fund Flows

October 31st, 2013 8:15 pm | by John Jansen |

Bank America Merrill Lynch reports significant outflows from high grade funds but their analyst believes that it is a one off event:

Via Merrill Lynch:


  • Don’t be spooked by the outflow. This week high grade funds reported the largest outflow since June, at $2.67bn. However, almost all of it, or $2.60bn, came from just one fund on one day, suggesting that it was likely a one-off event and no signal of a broader rotation out of high grade bond funds (yet). The relatively subdued flows for high grade bond funds excluding the large single-fund outflow consisted of a $0.46bn inflow into short-term funds and a $0.54bn outflow outside of short-term funds, similar to what we have seen lately. This contrasts with flows for the period from June to September, when both inflows into short-term funds and outflows from longer-duration funds were significantly higher. Hence, the smaller flows reported during the month of October suggest less rotation out of longer-term funds and into short-term funds as interest rates fell.
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