Lipper-FMI fund flow data - Week ended August 08

Trade war escalation and recession fears after the publication of a PMI indices largely below consensus (51.2 for Manufacturing, at the lowest since May 2016, 53.7 for Services compared to 55.5 expected and at the lowest since August 2016 ) caused major outflows in US HY funds. They saw $4.07bn exit the asset class last week, making the largest w eekly outflows since Oct 2018. The widening of 20bp of US HY spreads since the start of August actually appears limited in this context and we believe it might get worse. Leveraged loans posted their 38 th consecutive weekly outflows, including $244mn outflows in ETFs in the last week and leading to a YtD figure outpacing the $20bn net outflows. On the other hand, US IG funds managed to reverse the trend observed last week, with almost $2.8bn of weekly net inflows.