Calls that high-yield bond
are damaged goods appear to have been premature. It was less than
three weeks ago that
some mainstream financial media outlets
were quick to highlight outflows from the largest U.S. junk bond
ETFs, including the iShares iBoxx $ High Yield Corporate Bond
Recent price action in HYG and rival funds such as the SPDR
Barclays Capital High Yield Bond ETF (NYSE:
) suggests recent outflows have had minimal impact on the
performance of these funds. HYG and JNK, the two largest junk
bond ETFs by assets, closed flat on Tuesday, but the flat close
is enough to have both funds trading at multi-week highs.
HYG closed today at its highest levels since mid-October
and looks poised to breakthrough some stiff
resistance at $93
. JNK is bumping against strong resistance at $40.50, but even
after falling one cent on Tuesday, the ETF is still at its
highest price area since October.
The PowerShares Fundamental High Corporate Bond ETF (NYSE:
) also closed flat on the day, but that is enough to have ETF at
its highest price in nearly two months. PHB closed less than 0.2
percent below its 52-week high.
In another sign that investors are still embracing high-yield
bond ETFs, some of these ETFs are seeing surging inflows. As
Benzinga noted on November 14
, the SPDR Barclays Short Term High Yield Bond ETF (NYSE:
) had $433.1 million in assets under management on November 13.
That number has since soared to $518.7 million,
according to State Street data
Additionally, the The PowerShares Senior Loan Portfolio (NYSE:
) continues to add to its AUM total. In mid-November, the ETF's
assets tally was $1.32 billion. At the start of trading on
December 4, that number had grown to $1.37 billion. BKLN closed
Tuesday less than 50 cents below its all-time high.
Then there is the case of the Market Vectors International
High Yield Bond ETF (NYSE:
). IHY, which debuted in April, also closed Tuesday at its
highest levels since October. The ETF, one of the first to give
investors access to global high-yield corporates, is arguably the
poster child for the inability of some market observers and
participants to comprehend the fact there are other junk bond
ETFs on the out there besides HYG and JNK.
IHY has returned 4.3 percent since its debut and $195.4
million in AUM as of December 3,
according to Market Vectors data
. That is up from $180.7 million just two weeks ago and a nearly
ten-fold increase in assets since late September.
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