BlackRock Junk-Bond ETF Has Record Withdrawal as Rally Fades

Investors yanked a record volume of cash from BlackRock Inc. (BLK)’s exchange-traded fund that buys junk bonds as the notes lose value for the first month since May.

The $16.3 billion fund reported an outflow of 2.4 million shares yesterday, equal to about $218.9 million, according to data compiled by Bloomberg. That’s the biggest daily withdrawal in the five-year history of the iShares iBoxx High Yield Corporate Bond Fund, the largest of its kind.

The five largest junk-bond ETFs, which allow investors to speculate on the securities without actually owning them, have lost $1.97 billion of assets since Sept. 20 as investors wager that a four-year rally in the debt is running out of steam. High-yield bonds in the U.S. are losing 0.14 percent this month after posting 12.9 percent returns this year through October, according to Bank of America Merrill Lynch index data.

BlackRock’s ETF has lost 1.2 percent since Sept. 20, when the amount of its assets reached a high of $17.4 billion, Bloomberg data show. Its shares fell as much as 0.1 percent today after a 0.2 percent decline yesterday, trading at $91.18 at 12:20 p.m. in New York.

To contact the reporter on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net

To contact the editor responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net

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BlackRock’s Junk-Bond ETF Has Record Withdrawals as Rally Fades

Scott Eells/Bloomberg

Investors yanked a record volume of cash from BlackRock Inc.’s exchange-traded fund that buys junk bonds as the notes lose value for the first month since May.

Investors yanked a record volume of cash from BlackRock Inc.’s exchange-traded fund that buys junk bonds as the notes lose value for the first month since May. Photographer: Scott Eells/Bloomberg