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What Do They Know? Investors Dump High Yield Bond Funds Most Since Election

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After rising for 10 of the previous 11 days, ever-hopeful that we can get back to 'abnormal', it appears a realization of just how levered US corporates are, as well as testing and losing a key technical level, prompted the biggest fund outflow from HY bond ETF since the 2016 election...

With HY Yields at their lowest decile on record...

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As of Wednesday’s closing levels, HY spreads returned to their January tights while their IG and EM counterparts remain significantly wider...

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Perhaps, investors suddenly woke up to the near-record high leverage that US Investment Grade firms are carrying...

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And High Yield firms are even worse...HY Leverage at record highs...

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It appears that as soon as HYG reached its 100-day moving-average, that was good enough and sellers used the bounce to sell...

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And sell they did - the biggest outflow since the election in 2016...

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So what do they know?

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