Reply #39: Fund Managers Now More Prone to Risk

[54anickel]

http://www.cfo.com/article.cfm/3148478/c_3148521?f=home_todayinfinance

The latest word from the Street is that investment-fund money is “generally leaving safer assets and flowing into riskier investments,” observed Merrill Lynch high-yield analyst Oleg Melentyev, in his weekly “Know the Flow” report.

Citing a report from AMG Data Services, Melentyev, observed that $14 billion left money market funds in the week ended Aug. 25, extending “the zigzag flow pattern this group is experiencing to 13 consecutive weeks.” This figure represents 0.75 percent of assets under management of money market funds.

The prior week—the one ending August 18—saw a net inflow of $7.4 billion into money-market funds, according to AMG So far this year, investors have withdrawn $111.6 billion from this group of funds.

Municipal debt funds added week 22 to the count of their consecutive weekly outflows. So far this year, the negative attitude toward munis cost them $9.8 billion in cash withdrawals (2.9 percent of assets).

If safe havens became less popular for investments during the period, gains were seen in just about every category of investment containing more risk than money markets and munis. “High-yield bond mutual funds broke the string of four consecutive (although relatively insignificant) outflows with a $264.0 million,” Melentyev reports. The inflow represented a 0.31 percent addition to their assets and brought the year-to-date total to a negative $7.8 billion (5.7 percent).

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