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Investment-Grade Corporate Bond ETFs See Record Inflow


Weekly inflows to investment-grade corporate bond funds were the highest in over two decades amid signs investors are moving away from junk debt following a strong run.

Investors put $2.4 billion into investment-grade corporate bond funds, the most on a record that spans nearly 21 years, Reuters reports. Of that total, $1.4 billion flowed to investment-grade corporate bond mutual funds, and the rest went into ETFs.

The iShares iBoxx Investment Grade Corporate Bond (LQD) has seen inflows of $562.4 million over the past week and was the third-best selling fund among all ETFs, according to IndexUniverse data.

The iShares iBoxx High Yield Corporate Bond (HYG) and SPDR Barclays Capital High Yield Bond (JNK) have both seen outflows of more than $200 million since the end of September.

The recent buying patterns in investment-grade and high-yield ETFs suggest investors are moving into safer corporate bonds. [High-Yield ETFs: Rotation from Junk to Quality]

Meanwhile, in equity ETFs, investors pulled $2.1 billion from SPDR S&P 500 (SPY) in the latest week, according to Reuters, while ETFs overall posted net outflows of $2.8 billion.

“Some of it is investors just taking a breather,” said Tom Roseen, head of research services at Lipper, in the report. [S&P 500 ETFs Battle Key Resistance After 18% Rally]

iShares iBoxx Investment Grade Corporate Bond

Full disclosure: Tom Lydon’s clients own LQD, HYG, JNK and SPY.

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