29 August 2014 by HCM
Everybody will agree in saying that August has been a volatile month. The Ukrainian situation has generated numerous headlines which pushed the market up and down over the last few weeks and created some very abrupt moves. The outflows from HY funds in the US that took place in July impacted all market compartments and particularly the European High Yield at the beginning of August, but were quickly forgotten as there was no follow through, with all funds actually experiencing inflows afterwards. So much so that US HY ended up being the outperformer. But people who have been away for a month should not entirely rely of the benign picture painted by the monthly variations. The intense volatility of the recent period shown the market that liquidity dries up very quickly when investors rush for the exit and this certainly warrants a bit of caution for the times ahead.