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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