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)