Sheep Line Up For Slaughter: Investors Buy Most Junk Bonds Ever

HYG – the high yield bond ETF – is trading at its richest to NAV in over 4 years after 7 straight days of inflows. This flowgasm seemed to crescendo yesterday where Credit Suisse estimated a very sizeable HY retail fund inflows (total amount hitting ~$1.9bn) which they note beat 5-Nov-2014 as being the largest inflow day ever.

With the ETF at such an extreme in valuation and given the historical performance of the fund after 7 straight days of inflows…

(green shaded regions show 7 straight days of inflows.. and the red arrow the subsequent performance)

It appears the sheep are heading for slaughter once more…

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