The largest corporate bond ETF, the iShares iBoxx USD investment grade corporate bond ETF (LQD) witnessed record daily outflow of $3bn on Monday, as per Bloomberg data. This is the largest daily outflow since inception in 2002. This underscores the reversal in sentiment, following six consecutive weeks of inflows.
The selloff comes as Fed officials have reiterated a hawkish stance, stating that rates are likely to remain higher for longer. Despite the 0.7% dip in LQD on Monday, the ETF has delivered total returns of about 5% over the past month as market participants previously expected a Fed pivot, slowing the pace of hikes into 2023.
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