What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

what do they know investors dump high yield bond funds most since election

After rising for 10 of the previous 11 days, ever-hopeful that we can get back to ‘abnormal’, it appears a realization of just how levered US corporates are, as well as testing and losing a key technical level, prompted the biggest fund outflow from HY bond ETF since the 2016 election…

With HY Yields at their lowest decile on record…

What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

As of Wednesday’s closing levels, HY spreads returned to their January tights while their IG and EM counterparts remain significantly wider…

exhibit

Perhaps, investors suddenly woke up to the near-record high leverage that US Investment Grade firms are carrying…

What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

And High Yield firms are even worse…HY Leverage at record highs…

What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

It appears that as soon as HYG reached its 100-day moving-average, that was good enough and sellers used the bounce to sell…

What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

And sell they did – the biggest outflow since the election in 2016…

What Do They Know? Investors Dump High Yield Bond Funds Most Since Election
 

So what do they know?
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