Exchange-traded funds of junk debt proved to be robust through the sell-off in the high-yield market in the early part of last week - shaking off concerns that such products would exacerbate a sharp rout across the asset class. Trading volumes in the iShares iBoxx High-Yield Corporate Debt ETF (HYG) surged to US$18.2bn from December 7 to 16, a record for any eight-day period, driven by the closure of Third Avenue Asset Management and lingering energy market concerns. Some market participants - such as Carl Icahn and Howard Marks -had concerns that high trading volumes in debt ETFs during a time of stress would trigger a dislocation in the value of funds against the value of underlying bonds.
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