Wall Street is dipping back in to the junk bond market after the rout in high-yield corporates resulted in record outflows just a week ago.
Citigroup on Monday and Bank of America Merrill Lynch last week both said it's time to add exposure to high yield, now that prices are cheaper. For the week ended Aug. 6, investors worldwide pulled a record $7.07 billion out of high-yield junk bond funds and ETFs, according to Lipper.
A JPMorgan strategist, in fact, likes junk bond ETFs so much he says they look more attractive than stocks in the near term, based on flows.
Most of last week's outflows were from mutual funds, with the $1.3 billion balance from ETFs. The strategist, Nikolaos Panigirtzoglou noted in an afternoon report that the ETF outflows of 0.6 percent assets under management improved from the withdraw of 4.3 percent the previous week. At the same time, U.S. equity ETF outflows accelerated, but outflows are just 0.5 percent since July 24, about a quarter of the outflows of previous stock market corrections, he noted.