Junk bond ETF's September outflow signals investor anxiety: WSJ

Oct. 04, 2018 10:19 AM ETHYG, JNK, DHY, HIX, EAD, PHT, HYT, HYLD, JQC, ACP, ANGL, CIK, MCI, DSU, SJB, KIO, NHS, CIF, ARDC, IVH, GGM, AIF, MPV, FHY, PHF, JSD, VLT, HYHG, HYLS, DHG, PCF, MHY, UJB, HYGH, FALN, SPHY, THHY, ESHY, HYLB, HYXF, WFHY, HYDB, BSJP, HYUP, USHYBy: Liz Kiesche, SA News Editor
  • investors pulled more than $2B from the iShares iBoxx $ High Yield Corporate Bond Exchange-Traded Fund (HYG -0.3%) last month, the most in a single month since May 2016, the Wall Street Journal reports.
  • Furthermore, some investors are buying protection in the form of option contracts that would help to offset losses if junk debt sells off.
  • The resilience of high-yield credit at a time when the Federal Reserve has been raising interest rates is leading to growing apprehension among some, the WSJ says.
  • The spread between Treasury yields and the average speculative-grade bond yield has declined to the narrowest level in a decade, indicating that investors are willing to take less compensation on riskier companies on the basis that economy is strong enough for these companies to make their debt payments.
  • Previously: Junk bonds' risk premium shrinks to smallest since 2007 (Oct. 2)
  • ETFs: HYG, JNK, DHY, HIX, EAD, PHT, HYT, HYLD, JQC, ACP, ANGL, CIK, MCI, DSU, SJB, KIO, NHS, CIF, ARDC, IVH, GGM, AIF, MPV, FHY, PHF, JSD, VLT, HYHG, HYLS, DHG, PCF, MHY, UJB, HYGH, FALN, CJNK, THHY, HYIH, HYLB, HYXE, WFHY, HYDB, BSJP, HYUP, USHY

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