The risk-on mood gripping U.S. markets Tuesday showed up in junk-bond ETF volume.
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The largest ETFs that track the two asset classes posted about $3.1 billion of withdrawals last week.
February 5 -
The fund will give investors exposure to noninvestment-grade bonds for less than half the cost of its flagship high-yield offering.
October 27 -
The outflows have rekindled a popular concern that the funds could portend the start of a liquidity crunch.
June 2
At least one investor moved 1 million shares worth about $28 million in the SPDR Bloomberg Barclays Short Term High Yield Bond ETF (SJNK). By the afternoon, turnover had reached almost $86 million, nearly double the daily average for the past year.
A mere 10 seconds after that trade, there was a block sale of almost 900,000 shares — worth just over $27 million — of the SPDR Bloomberg Barclays Investment Grade Floating Rate ETF (FLRN).
“Investors were quite nervous through the month of February and into March, but gradually that has faded,” said Peter Jankovskis, co-chief investment officer at Oakbrook Investments. “People have been focusing on the strong earnings growth now that we’ve had for two consecutive quarters following that drop off. They’ve realized that this economy and growth can continue.”
The S&P 500 rallied to a record Tuesday afternoon, surpassing its prior high from January as two quarters of 24% earnings gains and strong U.S. growth prospects have investors betting the nine-year bull market has more room to run. SJNK added 0.2%.
