Journalist PRJournalist PR
    Facebook Twitter Instagram
    Journalist PRJournalist PR
    • Tech
    • Entertainment
    • Celebrity
    • Health
    • Games
    • Politics
    • Trending
    Journalist PRJournalist PR
    Home»Business»Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion

    Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion

    0
    By Sam Houston on March 2, 2023 Business
    Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion
    Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion
    Share
    Facebook Twitter LinkedIn Pinterest Email

    A big change in how the Federal Reserve plans to raise interest rates has caused an outflow from credit exchange-traded funds that has never happened before.

    Last month, three of the most popular corporate bond ETFs lost a total of $11.9 billion. The iShares iBoxx High Yield Corporate Bond ETF, which is worth $12.8 billion, lost a record $4.9 billion (ticker HYG). According to data collected by Bloomberg, the $33 billion iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the $7.4 billion SPDR Bloomberg High Yield Bond ETF (JNK) also had their biggest monthly withdrawals ever.

    Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion
    Credit ETFs Are Getting Hit Hard By Record Withdrawals Of Almost $12 Billion

    Fixed-income markets of all kinds were shaken up in February as investors changed how they thought the Fed would fight inflation. Treasury yields are at their highest level in more than a month because inflation is still going strong. Traders are getting ready for the possibility that the central bank will set rates higher than they thought before. Even so, spreads on both investment-grade and high-yield debt are still a lot lower than they were at their highest point last year. This suggests that there will be more pain in the future.

    “The two drivers of return — the risk-free rate and the spread — are both probably still too low for the environment we’re in, one where growth and inflation remain too hot and the Fed may have to go further,” Sameer Samana, Wells Fargo Investment Institute senior global market strategist, said. “So, the next meaningful move for spreads is probably higher.”

    The current pricing on the markets indicates that the Fed’s main rate will peak at approximately 5.5% in September, but other investors are betting that the benchmark interest rate will approach 6%. Traders were skeptical a month ago that the central bank would raise rates to 5% as part of its effort to hike rates.

    In case you’re looking for the most recent updates, click here:

    • ChatGPT Has Made The Tech Industry Chase Hype, But There Are Risks
    • The Petrobras Payout Is A Reward For Investors Who Didn’t Worry About Lula

    In February, as a result of the sudden shift in perspective, both HYG and JNK experienced losses of approximately 2.4%, the largest monthly loss since December. The performance of blue-chip debt was much worse, with LQD declining 4.5%, marking its worst showing since September.

    When investors pulled money out of ETFs that invest in corporate bonds, demand was robust for funds that behaved similarly to cash. During the month of February, more than $4.5 billion was deposited into the iShares Short Treasury Bond ETF (ticker SHV), making it the month with the largest monthly inflow in the fund’s entire 16-year history.

    Mona Mahajan, Edward Jones senior investment strategist, said on Bloomberg Television-

    “What’s notably different this cycle is that cash and cash-like instruments are yielding anywhere from 4% to 5% plus”

    “If investors do want to hang out, think about a recovery playbook but in the meanwhile put money in very attractively yielding assets, that’s a place where we’re seeing a lot of defense now.”

    Our motto is “information on time,” and our proud team really takes these words to heart. Journalist PR is a platform that gives you the latest news. We encourage people to check our website often for the latest news.

    (Source Link)

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Sam Houston
    • Website

    Hello, I'm Sam Houston, and I'm proud to be a part of the journalistpr.com team as a content writer. My journey into journalism has been quite an exciting ride, and it all began with a background in content creation. My roots as a content writer have equipped me with the essential skills needed to craft engaging narratives and convey information effectively. This background proved invaluable when I decided to make the transition into journalism. The transition allowed me to channel my storytelling abilities into producing news articles that not only inform but also captivate our readers.

    Related Posts

    Unveiling Incredible Hair Salon Magic with Hair Salon Landing Page Templates

    October 26, 2023
    Lorenzen Wright Wife

    Lorenzen Wright Wife: Wife of Slain NBA Star Denied Parole For Plotting His Murder

    March 24, 2023

    Discover How IP Desk Phones can Increase Productivity in Your Business

    January 30, 2023

    Leave A Reply Cancel Reply

    Latest Post
    A doctor holding a heart Description automatically generated

    The Role of Fnps in Improving Access to Healthcare Through Advocacy

    December 6, 2023
    Who is Normani Dating?

    Who is Normani Dating? Everything We Know About Their Relationship

    December 6, 2023
    Paolo Macchiarini Net Worth

    Paolo Macchiarini Net Worth: Where is He Now Today in 2023?

    December 5, 2023
    Steelers Ryan Shazier Net Worth

    Steelers Ryan Shazier Net Worth: What Was the Secret of His Success?

    December 4, 2023
    Jared Fogle Net Worth

    Jared Fogle Net Worth: From Subway Spokesperson To Convicted Criminal!!

    November 30, 2023
    OJ Simpson Net Worth

    OJ Simpson Net Worth From NFL Record-Breaker To Media Sensation!!

    November 29, 2023
    Journalistpr.com Logo
    About Us

    Welcome to JournalistPR.com, your trusted source for cutting-edge tech news and more. Our online magazine format offers engaging articles, vivid visuals, and entertaining videos to keep you informed and entertained. Stay ahead with us in the world of science and technology.

    • About Us
    • Contact Us
    • DMCA
    • Privacy Policy
    • Terms of Use
    • Write For Us
    • Fact Check Policy
    • Disclaimer
    • Ethics Policy
    • Correction Policy
    • Our Team
    Follow Us On
    • Facebook
    • Twitter
    © 2023 Journalistpr.com All rights reserved.

    Type above and press Enter to search. Press Esc to cancel.

    Go to mobile version