Investors returned to mutual funds and exchange-traded funds buying junk debt a week after redeeming $7.1bn amid a broad sell-off in risk assets and concerns over high valuations, FastFT reports.
High yield funds and ETFs attracted $680m of inflows in the week ended 13 August, according to Lipper data. This week’s inflows end four straight weeks of redemptions from junk bonds, totaling $12.6bn.
The sell-off has made junk bonds more attractive and issuance activity has started to return, with nearly $1bn worth of junk-rated debt being offered in the US markets so far this week, according to data compiled by S&P LCD and Dealogic.
Here, the FT’s Vivianne Rodrigues explores the slow return to junk.
