Big Outflows in Risky Credit Funds as Investor Concerns Grow

The video discusses significant outflows from riskier credit funds due to investor concerns over global trade tensions. It highlights ETF flows as indicators of market activity, noting substantial withdrawals from high yield bond funds. Despite these outflows, bond returns have been strong, with investment grade bonds outperforming high yield bonds. Borrowing costs remain low, making it a favorable time for credit, even amidst some risk aversion.

What was the main reason for the significant outflows from riskier credit funds?

• Decreased inflation rates

• Improved economic conditions

• Increased interest rates

• Global trade tensions

Which US high yield bond fund experienced its largest withdrawal since 2016?

• J&K

• HYG

• SPY

• LQD

What was unusual about the bond returns this year?

• Both high yield and investment grade bonds had negative returns

• High yield bonds outperformed investment grade bonds

• Neither bond type showed any returns

• Investment grade bonds outperformed high yield bonds

Despite outflows, what remains low, making it a good time to borrow?

• Unemployment rates

• Borrowing costs

• Stock market volatility

• Inflation rates

How do current borrowing costs compare to those in October and November of the previous year?

• They are higher now

• They are the same

• They are lower now

• They fluctuate frequently