Wall Street taking advantage of junk bond exodus

Traders work in the S&P 500 options pit at the Chicago Board Options Exchange.
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Even as retail investors shy away, Wall Street is still making a dash for trash.

In fact, the recent exodus of funds from high-yield bonds has only whetted the appetite of institutional investors, who are using the slump in junk prices as a buying opportunity, according to an analysis from the Wall Street Journal.

The mom-and-pop crowd ditched a net $13 billion in junk bonds for the four weeks preceding August 6, a trend that has pushed firms like Alliance Bernstein even deeper into the market.

"Investors who panic in these sell-offs—it's the wrong thing to do," Alliance's Gershon Distenfeld told the Journal.

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