High Yield Bond ETFs Impacted by Stock Slump

According to TrimTabs Investment Research, high-yield bond exchange-traded funds saw outflows of $4.1 billion, around 10% of the overall junk bond ETF market, in the five trading sessions through 2018-10-11, Thursday. That marked the largest week-long outflow for high-yield ETFs since TrimTabs has been tracking the data.

The selloff helped to widen credit spreads, the yield premium demanded by investors for owning junk bonds over Treasurys, to 3.54% as of last Friday (2018-10-12). That’s more than 30 basis points higher than the 3.16% hit 2018-10-03, which at the time marked the lowest spread since before the recession, based on the benchmark ICE BofAML US High Yield Master II index.

Source

MarketWatch, Sunny Oh, 2018-10-15, “HIgh Yield Bond ETFs fell Victim to Stock Slump”