BlackRock Junk ETFs Push Buyers to Dark Corners: Credit Markets
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Buyers of junk bonds are retreating to the market’s more obscure securities as the rise of exchange-traded funds fuels concern that such fast-moving cash is exacerbating price swings.
Investors are delving into smaller, older junk-bond issues that trade less frequently, pushing yields on such securities to the lowest on record, while those on more frequently traded notes are holding above lows reached last May, Barclays Plc data show. Wells Fargo & Co. credit strategists are recommending a list of bonds not owned by ETFs that investors should consider buying to lessen price volatility when everyone from retirees to hedge funds pull cash from them.