South African Bonds on Brink of Junk Status

According to Bloomberg, foreign investment in South African bonds total 38%, which would cause a major depression in bond prices should a sell-off occur.


Related: South Africa ETF’s Woes Can Continue

U.S. Investors Pile in on Floating Rates and Short Duration

In the U.S. capital markets, volatility continued its reign as the Dow Jones Industrial Average fluxed and then fell over 200 points as of 1:30 p.m. ET. In the fixed-income space, Brian Gilman of Virtu Financial saw increased activity in floating rate exchange-traded fund (ETF) names like the iShares Floating Rate Bond ETF (BATS: FLOT).

FLOT seeks to track the investment results of the Bloomberg Barclays US Floating Rate Note < 5 Years Index (the “underlying index”), which measures the performance of U.S. dollar-denominated, investment-grade floating rate notes. FLOT invests in the component securities of the underlying index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents, as well as in securities not included in the underlying index.

“Floating rate names remained active with flows more two-sided than they have been,” said Gilman.

For more trends in fixed income, visit the Fixed Income Channel.