Options traders were pricing in as high as a 74% chance the Fed could increase interest rates by December on Friday, but futures traders pared back bets to about 69% in response to the Federal Bureau of Investigation’s renewed probe into Democratic Presidential nominee Hillary Clinton’s use of private e-mails while secretary of state. The markets seem to believe that a Donald Trump presidency would be bad for stocks, add to uncertainty and cause the Fed to push off on a rate hike.

[related_stories]

While we are seeing outflows in the intermediate-term corporate bond ETFs, like HYG and LQD, investors are still relying on fixed-income assets for yields. For instance, as we mentioned before, the PowerShares Senior Loan Portfolio (NYSEArca: BKLN), which tracks speculative-grade senior floating-rate bank loans that limit interest rate risk, has seen heavy investor interest, attracting $1.6 billion in net inflows over the past 90 days. BKLN shows a 3.72% 30-day SEC yield while HYG has a 3.01% 30-day SEC yield.

The high interest in BKLN and sudden disinterest in HYG suggest that investors are not as concerned about credit risk as rate risk. BKLN has limited rate risk as the floating component of a loan resets at an average 36.46 days, whereas HYG comes with an 8.36 year duration, which makes HYG more sensitive to changes to interest rates. Investors have also grown less concerned about defaults after a rebound in crude oil prices, which could help support the highly leveraged energy sector.