Recent buying and selling patterns in exchange traded funds suggest some income-hungry investors are rotating away from junk bonds and into bank loan ETFs with attractive yields.

For example, since the end of September, investors have pulled $607.6 million from iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) and $532.5 million from SPDR Barclays High Yield Bond (NYSEArca: JNK), according to IndexUniverse flow data.

Since then, they have added $405.1 million to PowerShares Senior Loan Portfolio (NYSEArca: BKLN).

The bank loan ETF has a 30-day SEC yield of 4.6%, while the junk bond ETFs are paying nearly 6%.

BKLN has some competition with the recently launched Pyxis iBoxx Senior Loan ETF (NYSEArca: SNLN). [Bank Loan ETFs]

Also, Blackstone‘s GSO Capital Partners and State Street Global Advisors have filed to launch an actively managed bank loan ETF. [Blackstone and State Street Ready Senior Loan ETF]

Morningstar analyst Timothy Strauts calls BKLN a satellite ETF holding for investors who are comfortable with higher credit risk and looking for floating-rate bonds to protect against rising interest rates.

“Bank loans are denoted high-yield for the sole reason that firms issuing them are highly leveraged,” he says. “With increased leverage comes the increased probability of default and bankruptcy.”