Outflows Begin To Hit Junk Bond Funds Once Again

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May 10, 2017 12:03pm NYSE:HYG

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Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today looks at continued appetite for emerging market ETFs, sudden outflows in junk bond funds, and some dip-buying in long volatility ETPs.

Emerging Markets continue to follow through strongly in early trading, as we see FXI (China) crossing above its 50 day MA this morning after a brief dip in the past week or so, and broad based EM ETFs such as VWO, EEM, and IEMG continue to hit new 52-week highs on strength across countries. As we have mentioned on several occasions, VWO and IEMG especially have seen notable inflows year-to-date.

On the flipside, SPY continues to see substantial bloodletting in terms of redemption flows, with nearly $8 billion leaving the fund lately, and High Yield Corporate Bonds via both HYG and JNK have also been pressured with a substantial over $1.5 billion and $400 million leaving the funds respectively.

Elsewhere, we have seen some bottom fishing in VXX (iPath S&P 500 VIX Short-Term Futures ETN) options via June 15 calls (VXX is trading in the low $14s currently and just off of its all-time low traded at yesterday).

The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG) was trading at $87.95 per share on Wednesday morning, up $0.33 (+0.38%). Year-to-date, HYG has gained 1.62%, versus a 7.24% rise in the benchmark S&P 500 index during the same period.

HYG currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 36 ETFs in the High Yield Bond ETFs category.

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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