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High-Yield Bond ETFs Fall Amid Outflows


Yesterday we spoke about the price pressure that U.S. Treasury bonds, particularly longer dated issues, have seen in recent sessions and today we investigate the High Yield Corporate Bond space.

The two biggest entries in the space, JNK (SPDR Barclays High Yield Bond, Expense Ratio 0.40%) and HYG (iShares High Yield Corporate Bond) have both seen notable outflows in recent sessions, totaling about $500 million collectively.

With twenty seven ETPs currently classified in the High Yield Bond category, it is not terribly surprising to see some portfolio re-shuffling at these levels given the strong run that both JNK and HYG have had in the past year.

Other lesser known, but growing funds in this category that may stand to benefit from such allocation changes include HYS (PIMCO 0-5 Year U.S. High Yield Corporate Bond, Expense Ratio 0.55%), SJNK (SPDR Barclays Capital Short Term High Yield Bond, Expense Ratio 0.40%), PHB (PowerShares High Yield Corporate Bond, Expense Ratio 0.50%), and HYLD (Peritus High Yield, Expense Ratio 1.35%).

It should also be noted that not coincidentally, SJB (ProShares Short High Yield, Expense Ratio 0.95%) has seen a healthy uptick in trading activity in recent sessions as this ETF targets the inverse return (unleveraged) of the iBoxx $ Liquid High Yield Index (the same benchmark that HYG tracks on the long side).

SJB which typically only averages about 29,000 shares traded on a daily basis saw volume swell to nearly ten times that during Tuesday’s session. Assets are clearly in motion at this juncture in the high yield corporate ETF space, and we will see where things align themselves after the dust settles.

SPDR Barclays High Yield Bond

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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