Close Menu
Fund Focus News
    Facebook X (Twitter) Instagram
    Trending
    • Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245
    • Best SIP mutual funds: Top 10 schemes with up to 27% annualised returns — ₹10,000 monthly SIP grows to ₹49 lakh in 10 years – Money News
    • Capri Global Capital annonce que Quant Mutual Fund augmente sa participation dans la société à 5,96 %
    • Yilgarn Iron Investments Pty Ltd finalise l’acquisition du complexe Yilgarn Hub Iron Ore auprès de Mineral Resources Limited
    • Rs 6,000 SIP Vs Rs 6,00,000 Lump Sum: Which can generate a higher corpus in 30 years?
    • Jio BlackRock Mutual Fund makes debut with three debt scheme launches
    • L’intégrale de BFM Bourse du lundi 30 juin
    • BFM Bourse : 17h/18h – 30/06
    Facebook X (Twitter) Instagram
    Fund Focus News
    • Home
    • Bonds
    • ETFs
    • Funds
    • Investments
    • Mutual Funds
    • Property Investments
    • SIP
    Fund Focus News
    Home»Mutual Funds»HY sees strength, inflows to continue
    Mutual Funds

    HY sees strength, inflows to continue

    July 22, 2024


    Inflows into high-yield muni mutual funds have continued over the past several weeks due to positive performance, expected Federal Reserve rate cuts and market participants’ desire to lock in higher yields.

    The high-yield sector continues to show strength, with inflows of $364.4 million for the week ending Wednesday, marking 13 straight weeks of inflows, according to LSEG Lipper.

    The money into high yield is coming from cash, cash equivalents and the cash flow other investments, including munis, are producing, said John Miller, head and chief investment officer of First Eagle’s High Yield Municipal Credit team.

    It could also be coming from other mutual funds from within a family, said Matt Fabian, a partner at Municipal Market Analytics.

    The inflows this year are a “welcome change” from 2022 and 2023, said MacKay Shields strategists, with inflows stemming from a myriad of factors.

    Nuveen's head of municipals John Miller will step down after 27 years at the firm.
    The money into high yield is coming from cash, cash equivalents and the cash flow other investments, including munis, are producing, said John Miller, head and chief investment officer of First Eagle’s High Yield Municipal Credit team.

    Stephen Green Photography

    For one, it’s a seasonally strong time of year with muni bonds “producing a lot of cash flow for bond holders,” Miller said.

    Additionally, there is positive performance for both investment-grade and high-yield, with the former seeing returns recently turn positive year-to-date and the latter seeing “solidly” positive performance for most of the year, he noted.

    Furthermore, approaching Fed rate cuts have acted as a “catalyst” for investors to return to long-duration fixed income, and “the growing confidence has slowly brought investors back,” said Daniel J. Close, head of municipals at Nuveen.

    Lastly, many market participants are “underweighted” due to large outflows from 2022 and 2023, Miller said, and 2024 has yet to replace all the money pulled from funds in those two years.

    “It’s an indicator that maybe people are underweighted versus their long-term goals, and they’re taking this as the window of opportunity to get those weightings back where they want to be,” he said.

    The inflows reduce the “urgency for high-yield investors to sell positions to meet redemptions,” MacKay Shields strategists said.

    Despite this, they noted, there are some instances of market participants selling “misunderstood credits at prices that don’t reflect their true fundamentals.”

    “These selling decisions often stem from positions with modest book yields acquired when interest rates were much lower, making them less attractive in the current higher-rate environment,” MacKay Shields strategists said.

    Furthermore, some portfolios have been rebalanced by investors “in favor of higher quality sectors and enhanced liquidity,” they said, noting “liquidity constraints during outflow cycles often lead to the sale of larger, more liquid names and sectors to meet redemption needs.”

    Inflows into high-yield will continue, market participants said.

    “As people start looking for a longer-term home for their money, high-yield funds should continue to see some flows,” said Matthew Norton, chief investment officer of municipal bonds at AllianceBernstein.

    “People want to lock in higher yields for longer, and there’s no better way to lock in higher yields for longer than muni high yield,” he said. “Muni high-yield has wide spreads, more additional income than investment-grade and is a very long duration asset class in general.”

    With “pretty high” yields, extra income compared to high grades, and upcoming Fed rate cuts, “it’s a good time to move money into high yield,” Fabian said.

    “Getting more investors into high-yield means … investors become more adventurous, and what they’re willing to lend to,” he said. “That makes this ‘restructuring wall’ easier to climb if we have fresh investment and lenders becoming more aggressive.”

    And as fund flows “pick up,” high yield technicals should improve further, Close said.

    “This would be a catalyst for further spread tightening, particularly in more alpha-driven exposure where credit selection and research drive price appreciation,” he said. “The ability to source these deals compared to more beta-driven exposure in the larger areas of the high-yield market provides meaningful credit spread compression opportunity even as the broader high-yield market has moved closer to fair value.”



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email

    Related Posts

    Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245

    July 1, 2025

    Best SIP mutual funds: Top 10 schemes with up to 27% annualised returns — ₹10,000 monthly SIP grows to ₹49 lakh in 10 years – Money News

    June 30, 2025

    Capri Global Capital annonce que Quant Mutual Fund augmente sa participation dans la société à 5,96 %

    June 30, 2025
    Leave A Reply Cancel Reply

    Top Posts

    Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245

    July 1, 2025

    Qu’est-ce qu’un green bond ?

    December 7, 2017

    les cat’ bonds deviennent incontournables

    September 5, 2018

    Quel est le rôle du service des impôts des particuliers (SIP) ?

    May 7, 2020
    Don't Miss
    Mutual Funds

    Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245

    July 1, 2025

    Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Mutual…

    Best SIP mutual funds: Top 10 schemes with up to 27% annualised returns — ₹10,000 monthly SIP grows to ₹49 lakh in 10 years – Money News

    June 30, 2025

    Capri Global Capital annonce que Quant Mutual Fund augmente sa participation dans la société à 5,96 %

    June 30, 2025

    Yilgarn Iron Investments Pty Ltd finalise l’acquisition du complexe Yilgarn Hub Iron Ore auprès de Mineral Resources Limited

    June 30, 2025
    Stay In Touch
    • Facebook
    • Twitter
    • Pinterest
    • Instagram
    • YouTube
    • Vimeo
    EDITOR'S PICK

    AXA IM Expands Its Range of Fixed-Income ETFs With Exposure to U.S. Treasury Bonds

    October 23, 2024

    Federal funding for ‘pipeline safety’ announced for Louisiana with Cenla taking the largest cut of the money

    October 23, 2024

    Federal COVID funds dry up for Asheville schools as new term begins

    August 21, 2024
    Our Picks

    Top 5 Equity Index Funds With up to 195% SIP Return in 6 Months: Rs 25,000 monthly investment in No.1 defence fund has skyrocketed to Rs 2,06,245

    July 1, 2025

    Best SIP mutual funds: Top 10 schemes with up to 27% annualised returns — ₹10,000 monthly SIP grows to ₹49 lakh in 10 years – Money News

    June 30, 2025

    Capri Global Capital annonce que Quant Mutual Fund augmente sa participation dans la société à 5,96 %

    June 30, 2025
    Most Popular

    ₹10,000 monthly SIP in this debt mutual fund has grown to over ₹70 lakh in 23 years

    June 13, 2025

    ₹1 lakh investment in these 2 ELSS mutual funds at launch would have grown to over ₹5 lakh. Check details

    April 25, 2025

    ZIG, BUZZ, NANC, and KRUZ

    October 11, 2024
    © 2025 Fund Focus News
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.