Signs are mounting something’s gone awry behind the facade of the narrowest corporate risk premiums in a decade. Just look at the iShares iBoxx Investment Grade Corporate Bond ETF (LQD), a $37 billion U.S. investment-grade bond ETF.

First, investors began to pull money from LQD at the fastest pace in more than a year. Now, speculators are circling, snapping up bearish options and sending short interest higher. The action paints a far gloomier picture than that of investment-grade spreads at the tightest since 2007.

“Nothing is to be gained by owning bonds across corporates and government right now” given lofty valuations, said Dennis Debusschere, head of portfolio strategy at Evercore ISI. Investors in ETFs may have a shorter-term horizon than money managers who often hold bonds until they mature, which might explain the contradiction in sentiment, he said.

Short interest on LQD has swelled to 2.8 percent of shares outstanding, the highest in 10 months, according to IHS Markit Ltd. data. Meanwhile, the ETF has seen $1.9 billion outflows so far this year, on pace for the biggest monthly loss since December 2016. Taken together, it’s clear that institutional investor sentiment on corporate credit “has turned markedly more bearish recently,” JPMorgan strategists led by  Nikolaos Panigirtzoglou wrote in a Jan. 26 report.

Options traders have also grown more weary. Contracts protecting against a five percent decline are now the most expensive versus calls, according to three-month data compiled by Bloomberg.

The discrepancy between ETF trading and spreads has been apparent throughout the spectrum of U.S. corporate bonds, as junk ETFs similarly bleed assets. Meanwhile, ETF investors have shifted their focus to emerging markets -- the iShares J.P. Morgan USD Emerging Markets Bond ETF is on pace to absorb $2 billion in January, the biggest monthly sum since the fund’s 2007 inception.

Though economic data support tight corporate credit spreads, there are possible technical factors on the horizon that are cause for alarm, said Nat Zilkha, credit co-head at KKR & Co.

“We think there are potential knock on effects as you see central banks pulling back from the Treasury market and certain areas of corporate credit they played in,” he said on Bloomberg TV. “You could see that travel to different parts of the corporate credit market.”

This article was provided by Bloomberg News.