Heading For The Exits

Investors flee high-yield bond funds
By John Spence, MarketWatch


BOSTON (MarketWatch) -- The exodus from bond funds advanced this week, with investors getting increasingly bearish on the high-yield or "junk" sector, according to a new report Thursday.

"We have high-yield outflows at $438 million for the week [ended April 13] and $6.7 billion since March 1," said Carl Wittnebert, director of research at Santa Rosa, Calif.-based TrimTabs. "That is over 4% of assets."

Meanwhile, inflows for stock funds increased, with investors adding $2 billion compared with $600 million last week.

Equity funds that invest primarily in U.S. stocks had inflows of $1.2 billion vs. additions of $710 million the prior week.

International stock portfolios posted net inflows of $734 million after investors withdrew $105 million the previous week.

Hybrid funds, which invest in both stocks and bonds, saw inflows of $576 million, holding steady after last week's $558 million inflow.

Separately, TrimTabs reported that domestic stock exchange-traded funds had negative net issuance of $1.3 billion during the week vs. an inflow of $896 million the prior week.

Inflows into international ETFs were $209 million, compared with the $214 million they added last week.