Junk bond funds enjoy first net inflow in 4 weeks
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NEW YORK, July 6 (Reuters) - Junk bond mutual funds ended a
three-week dry spell by taking in a net $159 million of new
cash in the week ended Wednesday, said sources citing AMG Data
Services.
Fund flows, tracked by Arcata, California-based AMG, are
considered a good barometer of sentiment for junk bonds, which
carry high yields because of their risks. The funds had
suffered $914 million of net outflows in the three prior weeks
amid a big selloff of telecommunications companies' bonds.
Telecom concerns have not dissipated, as evidenced by
Tuesday's downgrades by Moody's Investors Service of McLeodUSA
Inc. and XO Communications Inc. , two young
but relatively stable local phone carriers. Still, junk bonds
have shown some stability in this holiday-shortened week.
Though investors are still demanding an extra 7.82
percentage points of yield, relative to safe U.S. Treasuries,
to take on junk bond risk, that's down from 7.92 at the end of
June, according to Merrill Lynch & Co.
For the year, junk bonds have returned 3.9 percent,
according to Merrill Lynch. The bonds have given back more than
half of their gains since their March 9 peak, when they were up
8.45 percent for the year.
223-6317, jon.stempel@reuters.com ))
REUTERS
Rtr 08:55 07-06-01 |
