HYG Stock Recent News

We are focusing a lot of attention on fixed income at VettaFi in October. This week, we are hosting webcasts with AllianceBernstein and State Street Global Advisors.

Hello, VettaFi Voices! The Wall Street Journal mentioned today that the 10-year Treasury yield is the highest it's been since 2007 as we head into another earnings season.

U.S. companies binged on debt when rates were super low, so they wouldn't have to swallow the bitter pill of higher borrowing costs down the road.

High trading volume indicates high liquidity, which is a key characteristic of ETFs.

The credit spreads are tightest since 2007 and likely to significantly spike over the next 12 months. The recent rise in real yields has not affected the junk bonds, as HYG has been flat over the last 6 months. The increase in real yields increases the probability of a recession and credit crunch.

Investors were net sellers of fund assets (including those of conventional funds and ETFs) for the first week in four, withdrawing a net $16.8 billion. Equity ETFs witnessed net outflows for the second week in three, handing back a little less than $1.8 billion for the most recent fund flows week. For the second week in a row, taxable fixed income ETFs experienced net inflows, taking in $2.7 billion this week.

iShares iBoxx $ High Yield Corporate Bond ETF at risk from a reversal in risk appetite amid ultra-low credit spreads and a deterioration in the economy. The ETF offers a yield to maturity of 8.3% largely due to high UST yields, but actual returns should be significantly lower after bond losses and expenses. While HYG is still likely to outperform US stocks and post reasonable real returns, I would not buy at these levels other than as a relative value play.

Neuberger Berman, an asset manager with eight decades under its belt, is on the lookout for cracks in credit markets from the Federal Reserve's rate-hiking campaign.

Investors were net purchasers of fund assets (including those of conventional funds and ETFs) for the second week in a row, injecting a net $9.6 billion for the LSEG Lipper fund-flows week ended Wednesday, September 6. Equity ETFs witnessed net outflows for the second week in three, handing back a little more than $1.4 billion for the most recent fund flows week. For the first week in three, taxable fixed income ETFs experienced net outflows, handing back $1.1 billion this week.

Credit spreads are not signaling danger, not even in the emerging market space. High-yield bonds and emerging market corporate bonds are breaking out from 9-year bases against treasury bonds. Money is flowing into high-yield and emerging market bonds despite rising interest rates. Follow the money.