Historical high-yield cash balances

Cash balances held by high-yield mutual funds have continued to decrease, hitting a three year low in the third quarter. Notably, cash balances are now approximately 15% below their long-term average of 3.45%, in large part the result of a significant increase in new-issue volume As shown in the chart from JP Morgan, historically cash balances have tended to peak during periods of market stress and decline in more benign environments.