ETFs indexed to high-yield corporate bonds continue to experience outflows and selling pressure after they lost nearly 4% last month in the flight to safe-haven government bonds.
“High-yield mutual funds and exchange traded funds saw a net outflow of $382 million in the week ended Wednesday, May 30, according to Thomson Reuters-owned Lipper, marking the third straight week investors have lost faith in the sector,” Dow Jones Newswires reports.
In the previous week, junk bond funds saw net outflows of $2.5 billion, one of the largest weekly outflows in 20 years. [Are High-Yield ETF Flows Reversing After Buying Spree?]
There are several junk bond ETFs, including SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK), iShares iBoxx High Yield Fund (NYSEArca: HYG), PowerShares High Yield Corporate (NYSEArca: PHB) and PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS). [Fallout for High-Yield ETFs After Big Trade, Moody’s Warning]
Many technical analysts watch junk bond ETFs to gauge the health of the debt markets and as a leading indicator for U.S. stocks.