“Risks from China and a collapse in oil prices have trumped the Fed moving off the lower bound” as “the largest area of concern,” Bank of America analysts said.
Goldman Sachs Group Inc. analysts led by Charles P. Himmelberg, though, argue that the rebounding interest in junk bonds may be more technical in nature.
“If you ask me my best explanation, I’d bet it’s more technical,” Himmelberg told Bloomberg. “I bet there are enough fund managers who use it as a tool to make sure they’re tracking their benchmarks.”
The recent interest comes off a steep $4 billion in outflows from high-yield bond ETFs from mid-May through the end of June. Goldman Sachs pointed out that five of the largest outflows on record in junk bond ETFs occured over the past year.
For more information on the speculative-grade debt market, visit our junk bonds category.
Max Chen contributed to this article.