Key insights
- The author observes unusual flat performance in the JPST corporate bond ETF compared to typical cyclical movements in treasury ETFs (SGOV, SHV). They speculate about potential causes, ruling out general interest rate fluctuations and suggesting increased anticipation of corporate bond defaults. This could signal rising credit risk and potentially negative implications for US equities if corporate financial health deteriorates.
What is going on with Corporate Bond ETF?
Normally you would see a daily +0.0x% and then big drop at month end due to dividend payout.
But JPST has been relatively flat for the past month.
Meanwhile treasury ETFs like SGOV or SHV still look like normal cyclical movement. So that rules out fluctuation in interest rate for the cause.
Are we anticipating default in corporate bond or something?
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