With interest rates all but assured to rise soon, investors are fleeing a popular exchange-traded fund (ETF) that tracks short-term junk bonds.

The $2.4bn iShares 0-5 High Yield Corporate Bond ETF, or SHYG, had more than $465m of outflows on Wednesday, the most to date on a single day. But that was just part of the $1.5bn that’s left the fund over the last two weeks, as deserting investors have yanked almost 40% of its assets since May 29.

On May 23, Federal Reserve officials said the economic outlook warranted another interest-rate hike "soon". Since then, the Fed has issued its Beige Book economic report showing that the economy is expanding moderately with little indication of overheating.

And the labour department reported that in May, hiring increased more than forecast, wages rose and unemployment reached the lowest in five decades.

All of this adds to speculation that the Fed will raise rates sooner than later — making short-duration junk bonds increasingly unattractive as yield-hungry investors can get what they want from investment-grade debt.

"High-yield paper is starting to come under some pressure," said Dave Lutz, head of ETFs at JonesTrading Institutional Services. "It feels like portfolio managers are positioning for higher rates, with utilities among the only sector ‘oversold’ right now."