Bond Investors Break Pattern, Dump 'Junk'

Sven

Investors withdrew nearly $880 million from mutual funds and exchange-traded funds dedicated to high-yield bonds in the latest week ended Wednesday, the largest outflow from those funds since early February, according to data provider Lipper.

Yields from junk bond have now dropped below 5%. Also they are getting pricey even though it is the best performing bond sector this year.

Sven

Here is the link to the WSJ article.

online.wsj.com/article/SB10001424127887323728204578515271236522826.html

In case you can read the artle. Google the title and one can read the entire article.

STB65

I couldn't read it, and copying the title to Google only returned to the same site

Sven

Reply to @STB65: It was available last night. Can't locate it at this moment.

Investor

Reply to @STB65: Worked well by Google search. Clicked the link that said WSJ India. Although URL lines shows the exact same URL that Sven has posted, going directly does not work. You have to follow the search...

MaxBialystock

OK, just in terms of the excerpt you've highlighted: is this once again a case of the "average" investor getting scared and selling at just the wrong time---AGAIN? My own EM bond fund still shows (M*) a yield at 5.54%.....The 30-day SEC yield is 4.01%.

Sven

Reply to @MaxBialystock: It is possible that many investor got in junk bonds late and get out in the wrong time. The strong correlation to equity does not provide much in downside protection. The worst are those funds that concentrated in the lower quality (CCC and below) of high yield bond.

The 30-day SEC yield is more accurate and up to date than those from M*. EM bond yield is dropping as well this yield.