Let me spell it out for you: S/he is not trying to find out why the corporate junk bonds were dumping, he is trying to find out why the ETF's were selling offs, while the underlying were not. Here, it's not that hard ;-)
1) That other thing may have been too, too simplistic. 2) Consider this. Institutional investors hold bonds. Speculative traders hold ETF's. It's possible for the ETF to deviate greatly from the underlying bond portfolio because the bonds are in strong hands and the ETF's are in weak hands that are more prone to panic, regardless of what actual basis levels are between the ETF and the bond portfolio comprising the ETF. They're slower to get re-aligned. To trade corporate bonds too frequently can be very costly compared to "active" treasuries.
Yes, maybe the underlying bonds just didn't sell off because there was nobody trading them.. But I have no idea about frequency of trades in bonds, don't have access to a bloomberg either.
Hi, There was an announcement on Sep 22nd that the Markit Group was making changes to the iBoxx® $ Liquid Investment Grade Index. These changes would take effect September 30th. Anytime you change the composition of the index it will affect the NAV's of any fund that follows it. If you go to Google News and search ishares iboxx you will see the announcement and here's a link. http://pr-canada.net/index.php?option=com_content&task=view&id=127297&Itemid=61