Investing Article

BofA: Clients Sold Bond ETFs For The Longest Streak On Record

02/21/2018 - 12:34pm By: Zero Hedge

Over the weekend we shifted our focus from the inverse volatility ETF complex and to credit ETFs, both IG (LQD) and HY (HYG and JNK), highlighting that at least according to Deutsche Bank, these have a decent chance of being the next synthetic products to suffer sharp deterioration following the next market tremor.

What Deutsche Bank found was that in light of the sharp move in the VIX, credit ETFs had shown a surprising resilience, which however would be tested if the VIX does not mean-revert from its current level around 20 back to its all-time "complacency lows." Addressing this, Deutsche said that "if credit spreads do indeed reprice to higher volatility, the drawdown in credit ETFs could trigger meaningful liquidation, resulting in further pressure on spreads."...

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