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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@andyprior Fun article, not sure I agree that arbitrage will push up prices to sell to ETFs though; these ETFs individually do not hold large percentages of the underlying bonds so it would be hard to push up prices of the underlying no? Ive checked the underlyings for a few of the JNK holdings... -
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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@andyprior Ok just did my research, a few things stood out but the main thing is they're not buying any ETFs at a premium to NAV so basically they are just supporting in case of mispricings, if underlying bonds go to 0 the ETF will still take the hit regardless of Fed backing. They're also... -
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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@andyprior Did you get out? Im still short JNK, cant decide whether or not to hold, I know fed is buying but just read that AMC is filing for bankruptcy and Im sure plenty of others are soon to follow...