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Junk Bond ETFs Other Than the Big Two Seeing Inflows


Here are some under-the-radar junk bonds.


Exchange traded funds tracking high-yield bonds continue to be popular with investors. With the Federal Reserve announcing a third round of quantitative easing, risk appetite jumped, triggering a surge in junk bond ETF inflows.

Junk bond funds hauled in $3.63 billion in investor cash for the week that ended September 19, Bloomberg reported, citing EPFR data. ETFs gained 40%, or $1.45 billion, of those inflows, according to Bloomberg.

That is a tidy sum and one that implies that more than two ETFs are benefiting from increased institutional use of junk bond ETFs and retail investors craving these products as income-generating instruments. Still, the bulk of the junk bond ETF attention goes to the two largest players in the space, the iShares iBoxx $ High Yield Corporate Bond Fund (NYSEARCA:HYG) and the SPDR Barclays Capital High Yield Bond ETF (NYSEARCA:JNK).

The Bloomberg piece notes that for the week that ended September 19, HYG hauled in $402 million in new capital while JNK garnered $163 million in new inflows. That equals $565 million, meaning $885 in junk bond ETF inflows went into ETFs other than HYG and JNK. HYG and JNK have $17.3 billion and $12.8 billion in AUM, respectively, so their dominance in the high-yield bond ETF space is tough to challenge.

That also means there are junk bond ETFs that are flourishing and not drawing much mainstream attention for the effort.

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