More income investors are beginning to look into European speculative grade bond related exchange traded funds, as investors in Europe pick up high-yield debt at a record pace.

According to Dealogic, high-yield corporate debt issuers in Europe have sold a record €18.5 billion, or $26 billion, euro-denominated bonds since January, up 17% year-over-year, reports Ben Ednwards for the Wall Street Journal.

Meanwhile, European high-yield funds have attracted $13 billion so far this year, according to EPFR data. [Thriving European Junk Market Could Lift These ETFs]

The increased demand has helped push down yields on euro-denominated junk bonds to 4% last week, or two percentage points lower in the past year.

The market has seen “a race to the bottom in terms of covenant standards,” David Fancourt, a fund manager at M&G Investments, said in the article.

Nevertheless, some money managers argue that overall quality of European junk bonds have improved, pointing to an uptick of companies that previously held investment-grade ratings that are now given junk status after the debt crisis.

“Issuance this year has probably been of a higher quality than last year because the composition of the market has changed—there’s a lot more issuers now with higher ratings in there,” Arthur Milson, a fund manager at Standard life, said in the article. [Corporate Bond Issuance on the Rise]

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