The SPDR Barclays High Yield Bond ETF (ITE) and SPDR Barclays High Yield Bond ETF (JNK) have seen a large increase in short interest as investors are betting on falling prices in the future. As rates rise, the value of bonds inside a portfolio can decline to a certain degree and investors are selling high yields for less risky options.
Escalating trade tensions between the US and China have shepherded traders to ditch riskier market exposure and shift assets toward safer pastures with investments like U.S. Treasury bonds.
Although many investors have put money behind short-term debt assets as they are supposed to be less sensitive to interest rate fluctuations than vehicles with longer duration, some are opting for even more conservative investments because of their stability.
Related: US/China Trade War or Tit for Tat
SPDR Barclays High Yield Bonds Higher Risk
Against such a backdrop, companies like Envestment Asset Management are pulling their money out of high yield bonds. According to the company in its most recent filing with the SEC, Envestnet Asset Management Inc. decreased its holdings of ITE by 8.8% during the 4th quarter. Envestnet Asset Management Inc. owned approximately 0.08% of ITE worth $593,000.