High-Yield ETFs Hit as Investors Flock to Treasuries

Investors have been selling high-yield corporate bonds and running to the perceived safety of Treasury bonds amid the recent blast of risk aversion in markets.

“Junk” bond exchange traded funds such as SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK) and iShares iBoxx High Yield Corporate Bond Fund (NYSEArca: HYG) have sold off in August with investors scaling back risk in all parts of their portfolios. Some analysts watch high-yield ETFs to get a sense of risk appetite in markets. [High-Yield ETFs Among Casualties]

Elsewhere in fixed-income ETFs, muni bond funds such as iShares S&P National AMT-Free Municipal Bond (NYSEArca: MUB) have been volatile in the wake of the Standard & Poor’s credit downgrade on U.S. debt. S&P has lowered the triple-A ratings of thousands of muni bonds tied to the federal government, Bloomberg reported Tuesday.

This month has also been tough on preferred stock ETFs due to their heavy concentration in the financial sector. [ETF Spotlight]

SPDR Barclays Capital High Yield Bond ETF

as iShares S&P National AMT-Free Municipal Bond

PowerShares Preferred Portfolio (NYSEArca: PGX)

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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