Outflows Continue For Junk Bond Funds

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May 11, 2017 11:25am NYSE:JNK


Analyst/ETF Trader Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out big redemptions in the world’s largest ETF, accompanying small cap outflows, and some interesting moves for junk bond funds.

We have mentioned larger outflows in SPY lately (over $9 billion in redemptions), which has been joined recently with selling pressure in Small-Caps via IWM (iShares Russell 2000), with more than $1.2 billion flowing out of that fund.

Additionally, we have seen interest in very near term May 138 puts in IWM, and we cannot help but think of the old stock market mantra of “Sell in May and go away,” if this is indeed what certain market participants have in mind given the recent action in equity ETFs.

Elsewhere, we have seen some at-the-money call activity in the largest High Yield Corporate Bond ETF, HYG (iShares iBoxx $ High Yield Corporate Bond) involving the September 88 strikes, but at the same time the fund has seen substantial outflows lately ($1.9 billion out) — as has competing fund JNK (SPDR Barclays HY Bond).

The SPDR Barclays Capital High Yield Bond ETF (NYSE:JNK) was trading at $37.07 per share on Thursday morning, down $0.01 (-0.03%). Year-to-date, JNK has gained 1.70%, versus a 6.75% rise in the benchmark S&P 500 index during the same period.

JNK currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 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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