(Bloomberg) -- Inflows into junk-bond exchange-traded funds surged last month, outpacing investment-grade for the first time in 2016. The flip occurred as the Federal Reserve voted to raise interest rates, threatening the value of the underlying debt. Investors' sudden fondness for high-yield securities likely stems from the market's increased tolerance for risk since the election of Donald Trump, said Eric Balchunas, an ETF analyst for Bloomberg Intelligence. “There's a new variable in town and it's massive.”
To contact the reporter on this story:
Eliza Ronalds-Hannon in New York at eronaldshann@bloomberg.net
To contact the editors responsible for this story:
Christopher DeReza at cdereza1@bloomberg.net
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