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Has the high yield exodus begun

European investors pulled out a net 5bn from USD corporate high yield funds alone in July.


Global high yield funds suffered additional net outflows of €800mln, bringing the total amount of outflows for the month to €5.8bn. But net inflows are still comfortably on the positive side year-to-date, totalling €13.6bn.

The figures correspond with the latest sentiment data gathered by EIE, which show a serious drop in appetite for high yield bonds over the past months. Investors in both The Netherlands and Munich are abandoning the asset class, with many favouring investments in emerging market debt. Despite investors leaving high yield, net inflows into all fixed income categories combined increased to €18.6bn, the highest figure so far this year.


Mixed asset funds remained popular, with total net inflows of €13bn. Net inflows into equity funds were also positive, though European equity funds registered net outflows of €0.9mln. Asian equities, with net inflows of €3bn, were the most popular equity category, reflecting the booming emerging market equity fund selector sentiment across Europe.