U.S. High-Yield Bond Funds See Record Inflow After Exodus

johnN

https://www.bloomberg.com/news/articles/2020-04-02/u-s-high-yield-bond-funds-see-record-inflow-of-7-09-billion

/U.S. High-Yield Bond Funds See Record Inflow After Exodus

GOLDMAN SACHS GP
149.93USD+4.64+3.19%
IVZ
INVESCO LTD
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TDG
TRANSDIGM GROUP
284.47USD+11.93+4.38%
Investors poured a record amount of cash into U.S. high-yield funds this week as the junk-bond market recovered from its worst slump in more than a decade.

The funds added $7.09 billion in the week ended Wednesday, according to data from Refinitiv Lipper. This reversed a course that had seen almost $20 billion withdrawn from those same funds over the last six sessions, including $2 billion last week.




‘Tremendous Opportunity’
As U.S. junk bonds started to find a floor, investors including Goldman Sachs and Invesco are seeing reasons to buy.

“There are tremendous opportunities out there,” said Ashish Shah, co-chief investment officer of fixed income at Goldman Sachs Asset Management. He estimates junk bonds will return about 20% this year as growth rebounds in the fourth quarter and fallen angels outperform.

High-yield lost 11.5% last month and is down 13.6% this year. The market fell almost 16% in October 2008. Last year’s total return was 14.3% and high-yield hasn’t been up more than 20% since 2009, when it surged 58%./


Article discussed positives movements in junk bonds areas past few days. Maybe time to reconsider adding to corp junk bond positions. The curve may appears revived for junks past wk or so. Will it remains stable over next month?...who knows

https://www.google.com/search?q=jnk+stock

Mona

These muni bond funds continue to be volatile. GHYAX is down 4.55% over the past week, including 0.98% yesterday.

Mona

MikeM

Sounds on the surface like sell low - buy high.

Yes, I drank the muni bond koolaid at the start of the year too. NHMAX has done worst than GHYAX. Munis were suppose to be one of the better-safer bond performers.

Oh well, I'll just remain a deer in the headlights.

WABAC

They're betting the Fed will buy enough bonds to keep everyone from defaulting. Or maybe the risk of default is over.

I think I'll not follow the crowd on this.

Sven

No thanks - this is like a buy low and sell lower scenario. Junk bonds are filled with oil shade producers and given the oil priced situation they are going bankrupt. The carnage has yet all play out in this risky sector. Case in point, JNK is down 16.7% from December 31, 2019. Think I will stay with treasuries.

catch22

When junk bonds get more sorted out (meaning some are gone forever) and one may find yields into the teens; perhaps then will be a time to look. Ala, December, 2008.

The outlier being what will the Fed./Treasury do next to support whatever.

ADD: these statements only directed towards non-muni issues, which I do not follow or invest into.

davfor

The Feds activist policies helped to create this situation. They have been aware of the problems and have thought they were not excessive. This pandemic is a black swan event. The Fed has indicated they will do whatever it takes to keep the economy from unraveling. Given their activist inclinations, I will be surprised if they do not act.

BenWP

ORNAX had a chart that looked like a stock fund for some six years. Now it looks like an inverted hockey stick.