Investors have poured more than $10bn into junk bond funds since early June, highlighting the intensity of their hunt for yield amid a big rally in the bond market. Net inflows into the asset class registered $2.3bn in the week to Wednesday, according to EPFR data, the Financial Times reported. That brought the boost over the past five weeks to $10.6bn, the largest increase over any such period since 2017. Money managers have poured money into riskier investments, including speculative-rated bonds that generally have a higher probability of default than their investment-grade counterparts, over the past few weeks. Emerging market assets, which also typically carry a higher perceived risk, have also been in vogue. Sebastien Galy, strategist at Nordea, said, “the riskier part of the fixed income market is a bet that there is no recession ahead, priced to some perfection.” The shift into riskier corners of the market comes as large gains in the price of higher-rated debt have sent yields lower. Read more
Location