High-yield bond funds gain record inflows

SharesHigh-yield bond funds tracked by data firm EPFR Global posted record inflows of $4.7 billion (€3.3 billion) in the week ending 26 October as investors rediscovered an appetite for risk.

The inflows broke a record set the previous week and brought the two-week total to nearly $8 billion.

Funds devoted to US high-yield bonds accounted for more than 85% of the inflows, said EPFR, with demand coming from both institutional and retail investors. EPFR said most of the money came because investors pulled out of US intermediate, short term and short-term government bond funds, which saw combined outflows of $3.8 billion during the week.

Emerging market bonds funds also saw renewed interest. Year-to-date inflows for emerging market corporate bond funds have now exceeded the full-year total for 2010.

But European bonds continued to struggle in the week, which ended the day before European leaders signed a deal designed to save the eurozone from financial ruin. Europe, Middle East and Africa bond funds posted outflows for the 16th week in a row.

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