Exchange traded funds that invest in high-yield or “junk” bonds plunged nearly 2% on Thursday even though the underlying market was relatively quiet, according to reports.
The ETFs’ decline is another worrying sign for stock bulls, since weakness in the high-yield sector can foreshadow tough times for equities.
Trading volume in the junk ETFs surged on Thursday. [High-Yield ETF Pullback a Worrying Sign for Market?]
Barron’s noted that the high-yield ETFs fell sharply while the market for the underlying market was little changed.