ETFs that invest in high-yield corporate bonds are stuck in a six-day losing streak and threatening to break below their 50-day moving averages for the first time since June.
SPDR Barclays Capital High Yield Bond (NYSEArca: JNK) and iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) are down more than 2% the past week.
The two largest junk-bond ETFs on the market are paying yields of nearly 6% and have been extremely popular with investors trying to boost income in a low-rate environment. [Higher Yields, Regulation Drive Junk Bond ETF Boom]
For example, HYG and JNK have been among the best-selling ETFs in the third quarter, hauling in $2.3 billion and 1.6 billion, respectively. HYG has gathered more than $1 billion in the past month alone, according to ETF flow data from IndexUniverse.
“The two biggest junk-bond exchange traded funds usually change hands at a premium to their net asset value, reflecting strong investor appetite. Not today, though. Indeed, investors’ appetite looks more sated than usual lately,” writes Brendan Conway at Barron’s.