Investors pulled $4.86 billion out of junk bond funds during the week ending 23 September, the market’s worst weekly sell-off since March.
BlackRock’s iShares high-yield bond fund had $2 billion taken out of it on Monday and Tuesday alone.
The average yield on U.S. junk bonds rose to 5.83 percent on 23 September to its highest in two months, a sign of investors’ nervousness.
Concern over the lingering effects of the economic shutdown, fears of a resurgence of the COVID virus, and uncertainty about the U.S. election made investors skittish after President Trump refused to commit to a transfer of power if he loses the election.
The strength of the U.S. economic recovery depends on continuing federal stimulus, U.S. Federal Reserve Chair Jerome Powell and Vice Chair Richard Clarida both said last week.
