| Junk-bond investors are getting more and more desperate for liquidity as the Federal Reserve moves closer to ending its era of unprecedented stimulus. The proof is in the hefty price they’re willing to pay to own the most frequently traded bonds, which have steadily returned less than the broader $1.7 trillion U.S. high-yield market for more than three years.
They’re also increasingly turning to exchange-traded funds to enter and exit the market, as evidenced by bigger trade sizes. “People will say, ‘I just need a liquid way to gain exposure or reduce exposure,’” said Oleg Melentyev, a credit strategist at Deutsche Bank AG in New York. “The more liquid part of the market is trading at more of a premium.”..............................................Full Article: Source
|