The high yield bonds being sold by retail investors in the past month are being scooped up by institutional buyers seeking deals, said Tim Gramatovich, portfolio manager for the AdvisorShares Peritus High Yield ETF (HYLD). Gramatovich said the default rate remains low because nothing has fundamentally changed for this space or for the underlying companies. Meanwhile, he sees a well-functioning new issue market for high yield despite some quality concerns on the very low end, most notably at energy drillers. Finally, he said his fund can offer a higher yield than rival ETFs because he is an active manager who can buy equities and loans in addition to bonds.

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