Traders Pay up to Short Junk Bond ETFs

While the recent flight from junk bond ETFs has received ample attention, some market observers believe those departures were primarily the result of spooked retail investors fretting about the Federal Reserve raising interest rates. Notably, interest coverage, or the ability of an issuer to pay interest on its debt, remains robust for high-yield borrowers.

Last week, HYG and JNK saw combined inflows of over $620 million.

SPDR Barclays High Yield Bond ETF


Tom Lydon’s clients own shares of HYG and JNK.