Investors willing to accept slightly greater risk have been pouring into corporate bond exchange traded funds (ETFs) in search of higher yields and a chance to get on the ground floor of a Corporate America recovery.
Michael Aniero for The Wall Street Journal reports that market participants expect more high-grade issues will be sold as earnings pick up and blackout periods commence. Researchers note that investors are likely feeling more comfortable with corporate debt in light of the strong earnings season just witnessed. [Corporate Bond ETFs Catch a Wave.]
Further underscoring this point, Dow Jones Newswires reports that the value of U.S. corporate bonds were upgraded during the third quarter and topped the amount downgraded. So far this year, upgrades outweigh downgrades, $124.3 billion to $95.8 billion. Ratings services have been more likely to issue upgrades lately as the economy improves. [Why Corporate Bond ETFs Are Investors’ Choice.]
Sales of corporate bonds hit $204.4 billion in the third quarter, the most since the second quarter of 2008.