Investors in exchange-traded funds are abandoning junk bonds as riskier assets come under pressure from inflation fears.

About $1.2 billion was pulled from BlackRock’s iShares iBoxx High Yield Corporate Bond ( HYG) on Thursday in its worst day of outflows since February 2020, according to data compiled by Bloomberg. Traders have withdrawn about $5.6 billion from the ETF so far in 2021, putting it on track for its worst year since its inception in 2007. Meanwhile, the rival $9.6 billion SPDR Bloomberg Barclays High Yield Bond fund ( JNK) is on pace for its second week of outflows, totaling more than $970 million.

With interest rates at rock-bottom lows, investors had previously favored the high-yield market. But that calculation could now be changing, said Matt Maley, chief market strategist for Miller Tabak + Co.

“Investors are taking some risk out of their portfolio,” he said. “With inflation fears growing, that means the yields on some safer assets will be rising as well. That will provide at least some competition for a high-yield market that hasn’t seen any competition for a long time.”

Riskier assets have fallen out of favor as inflation could prove persistent enough to force the Federal Reserve to tighten its policy sooner than previously anticipated. The S&P 500 is on pace for its third-largest weekly decline of the year.

Short interest as a percentage of shares outstanding on JNK has climbed to more than 33%, the highest in at least a decade, according to data from IHS Markit. Such bearish bets have also risen to over 30% for HYG, the highest since March.

But high-yield debt tends to perform well during economic recoveries, so the recent outflows suggest “unfounded fear,” said James Pillow, managing director at Moors & Cabot Inc. HYG and JNK both rose about 0.3% on Friday as of 12:30 p.m. in New York.

“A capitulation signal, that’s what it was,” he said. “Credit spreads remain tight, showing no signs of longer-term deterioration. Even emerging market credit spreads remain well behaved. So, short-term capitulation, that’s all.”

The following are HYG’s biggest holdings as of May 12:

Name	Ticker	Position	Value (USD)	Change in Position	% of Total Asset Value
S. 7 ⅞ 09/15/23	EK553660 Corp	77,780	89.4 million	-380	0.4
TDG 6 ¼ 03/15/26	AW959806 Corp	79,652	84.6 million	-380	0.4
CNC 4 ⅝ 12/15/29	BH786416 Corp	64,778	71.4 million	-380	0.3
CZR 6 ¼ 07/01/25	BK127682 Corp	63,178	68.2 million	-380	0.3
F. 9 04/22/25	BH962214 Corp	54,625	66.7 million	0	0.3
CHTR 5 ⅛ 05/01/27	AM195794 Corp	62,563	65.5 million	-380	0.3
Teva 3.15 10/01/26	LW925840 Corp	66,042	61.9 million	-380	0.3
F. 8 ½ 04/21/23	BH962211 Corp	54,701	61.1 million	0	0.3
CHTR 4 ¾ 03/01/30	ZR665583 Corp	57,072	59.7 million	-380	0.3
CHTR 4 ½ 05/01/32	BP073764 Corp	55,952	59.3 million	0	0.3