Recent Risk-On Sentiment Spurs High Yield Bond ETF Flows

With the Dow Jones Industrial Average posting five positive days in a row, investors are starting to dip back into the high yield waters. Exchange-traded fund (ETF) flows are showing that a risk-on sentiment is slowly creeping back into the markets, making the case for high-yield bond ETFs.

“Fixed-income was quite active yesterday (Thursday) with the risk-on trend continuing and big flows going into high yield names,” said Brian Gilman of ETF Sales & Trading at Virtu Financial.

Names like the iShares iBoxx $ High Yield Corp Bond ETF (NYSEArca: HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (NYSEArca: JNK) have been leading the recent charge for high yield. According to data from XTF, fund flows within the past week topped $1.77 billion for HYG, while JNK brought in $331.27 million–both taking two of the top 10 spots for fixed income fund flows the past week.

HYG, in particular, has made a nice bounce off its Christmas Eve low in 2018, rallying towards its 200-day moving average in the one-year chart: