Wed, Jul. 15, 1:38 PM
- Both iShares' HYG and State Street's JNK saw their largest daily inflows on record this week, according to Bloomberg. This comes after nearly $4B in withdrawals over roughly the preceding year. Blame China and Greece, at least indirectly.
- I’d bet it’s more technical,” say Goldman's Charles Himmelberg. “I bet there are enough fund managers who use it as a tool to make sure they’re tracking their benchmarks.”
- In other words, with high-yield bond sales rare of late (partly thanks to global market jitters, courtesy of China and Greece), investors needing to get exposure to the paper turn to ETFs.
- So more global jitters could lead to more inflows, or relative calm cold lead to a quick reversal for that $1B.
- ETFs: HYG, JNK, HIX, HYLD, DHY, PHT, EAD, HYT, JQC, CIK, DSU, HHY, SJB, NHS, PHF, ACP, FHY, MCI, VLT, KIO, ARDC, CIF, MHY, AIF, ANGL, PCF, DHG, MPV, IVH, HYLS, JSD, UJB, CJNK, GGM, QLTC
Mon, Jul. 13, 10:11 AM
Fri, Jun. 12, 3:12 PM
- U.S. junk bond defaults rose to the highest level since October 2009 thanks to depressed prices for energy and metals. There were nine defaults in May, with the energy and mining industries accounting for all of them. For all Q2, those two industries have accounted for 93% of defaults.
- The junk bond default rate of 2.3% in May was 20 basis points higher than April.
- "Outside of energy, metals and mining, the fundamentals are strong, but the energy component of high yields has grown so fast, and lower commodity prices have really taken their toll,” says Fitch's Eric Rosenthal.
- According to Lipper, investors pulled $2.56B from U.S. junk-bond funds in the past week, the largest weekly outflow this year. For their part, high-yield borrowers raised just $1.83B this week, the slowest pace this year.
- Source: Bloomberg
- ETFs: HYG, JNK, HIX, HYLD, DHY, PHT, EAD, HYT, JQC, CIK, DSU, HHY, SJB, NHS, PHF, ACP, FHY, MCI, VLT, KIO, ARDC, CIF, AIF, MHY, PCF, ANGL, DHG, MPV, IVH, HYLS, JSD, UJB, XOVR, GGM, QLTC
Wed, Jun. 10, 12:29 PM
Fri, Apr. 10, 2:46 PM
Nov. 12, 2014, 1:16 PM
Oct. 22, 2014, 1:12 PM
- The high-yield market "rebounded spectacularly" between last Wednesday's panicky action and the start of this week, says Martin Fridson. If one were to annualize the 1.32% total return from this period, it would work out to a 160.9% gain.
- Some more numbers: The average yield in the BAML high-yield index topped 6.4% last week, and has dropped back to 5.9%, bringing the spread to Treasurys down more than 50 bps to 4.5%.
- Barron's Michael Aneiro continues to see value in a number of sizable closed-end funds still trading at around double-digit discounts to NAV, notably the BlakcRock Corporate High Yield Fund (HYT +1.2%), the AllianceBernstein Global High Income Fund (AWF +0.2%), and the Wells Fargo Advantage Income Opportunities Fund (EAD +0.7%).
- ETFs: HYG, JNK, BKLN, HYLD, PHB, SJB, SRLN, SNLN, IHY, ANGL, HYLS, FTSL, HYXU, PGHY, UJB, XOVR, QLTC, IJNK
Aug. 11, 2014, 11:53 AM
- The average yield has jumped to 5.77% today from 4.85% on June 24, and Barron's Michael Aneiro notes the two most popular ETFs - JNK and HYG - briefly traded at up to 2% discounts to NAV last week, though these disappeared pretty quickly.
- Not disappearing - and in fact growing - are discount to NAVs in some high-yield closed-end funds, with many now trading at double-digit discounts. Among some of the larger funds, writes Aneiro, the BlackRock Corporate High Yield Fund (HYT +1.7%) trades at a 10.2% discount to NAV and the AllianceBernstein Global High Income Fund (AWF +0.8%) sells for a 9.9% discount. The Western Asset High Income Fund II (HIX +1.1%) offers a 2.7% discount.
- ETFs: HYG, JNK, HYLD, SJB, IHY, ANGL, HYLS, PGHY, HYXU, UJB, XOVR, QLTC, IJNK
Feb. 27, 2014, 3:29 PM
- Typically dominated by individual investors seeking a yield, closed-end debt funds have become the latest hedge fund playground as they seek to profit from assets trading at their widest discounts to NAV since the financial crisis.
- Behind the discounts was last year's big jump in interest rates which sent the value of fixed-income assets way down. Too far down, say the hedge funds.
- Boaz Weinstein's Saba Fund (known among other things for landing the London Whale), has amassed $847.3M in publicly traded funds since beginning to buy last year. Pine River Capital has loaded up on nearly $160M worth.
- Among Weinstein's purchases are $75.7M of Pimco's Dynamic Credit Income Fund (PCI +1%) - making Saba the largest holder - $78.5M of BlackRock's Corporate High Yield Fund (HYT +0.3%), and $41.5M of BlackRock's Credit Allocation Income Trust (BTZ +0.6%).
- Also a large owner of PCI and HYT, Pine River has 1.4M shares of DoubleLine's Income Solutions Fund (DSL +1.6%).
- The magnitude of these purchases is unprecedented, says Warren Antler who specializes in CEF analysis at AST Fund Solutions.
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