Nevertheless, Shchuchinov points to the targeted sell-off in the fixed-income market. Specifically, investment-grade and leveraged loan bonds have not affected.
“High grade bond prices are up this month on lower interest rates, and consistent with flows following returns, inflows to high grade have been very strong,” Shchuchinov said. “Last week high grade funds reported inflows of $2.14bn, which marks the fifth $2bn+ inflow over the last six weeks. The high grade inflows included a $0.74bn inflow to short-term high grade funds and a $1.40bn inflow outside of short-term funds.”
Over the past month, the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) was up 0.2% and iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) gained 0.6%. Meanwhile, short-term bond ETFs, like the iShares Barclays 1-3 Year Treasury Bond Fund (NYSEArca: SHY) and Vanguard Short-Term Corporate Bond Index (NYSEArca: VCSH), were slightly higher over the past month. [Demand Favors Corporate Bond ETFs]
Additionally, the leveraged loan ETF, PowerShares Senior Loan Portfolio (NYSEArca: BKLN), which tracks speculative-grade securities, was up 0.1% over the past month.
“Unlike high yield, outflow from levered loan funds has remained subdued last week with a $0.26bn outflow, similar to $0.37bn outflow in the prior week,” Shchuchinov added.
For more information on the speculative-grade bonds, visit our junk bonds category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of HYG and JNK.