Investors continue to be willing to accept country and credit risk with exchange traded funds as highlighted by last weeks flows data.
Research firm EPFR Global notes that junk bond funds and funds with exposure to Italian equities were among the more impressive asset gatherers last week.
When it comes to high-yield bond ETFs the “where” and “why” were arguably synonymous last week as investors continued to pull cash from longer duration junk ETFs such as the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG).
As of May 5, HYG had lost $2.1 billion year-to-date, almost exactly the combined amount that had flowed into the shorter duration PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS) and the SPDR Barclays Short Term High Yield Bond ETF (NYSEArca: SJNK). [Short Duration Junk Bond ETFs in Focus]
The trend continued last week as HYG shed $94 million in assets, but HYS and SJNK brought in a combined $160 million.
Stoked by speculation quantitative easing from the European Central Bank could be near, investors poured $72 million into the iShares MSCI Italy Capped ETF (NYSEArca: EWI) last week. The $1.5 billion ETF has pulled in more than of third of those assets this year. [PIIGS ETFs Impress]
“Overall, however, flows during the week ending May 7 were shaped by institutional investors whose redemptions snapped Emerging Markets Equity Funds’ five week inflow streak and drove their biggest outflow from US Equity Funds since the first week of February,” according to EPFR.