High-Yield Bonds

Despite the ongoing volatility, the Federal Reserve has not shifted away from an interest rate tightening cycle. Consequently, investors should understand the potential effects or rising rates on the markets and incorporate alternative exchange traded fund strategies to adapt to the changes. On the recent webcast, Positioning Portfolios in a Rising Rate Environment, Joe Benevento, […]

As the Federal Reserve plans a “gradual” interest rate tightening cycle, exchange traded fund investors will have to adjust their portfolios accordingly. On the upcoming webcast, Positioning Portfolios in a Rising Rate Environment, Joe Benevento, CIO for Americans and Co-Head of Global Fixed Income at Deutsche Asset Management, Sebastien Galy, FX Strategist at Deutsche Bank, […]

Speculative-grade debt and junk bond-related exchange traded funds have been under pressure for most of 2015, potentially opening a bargain opportunity for fixed-income investors. Jonathan Beinner, chief investment officer at Goldman Sachs Asset Management, believes that one of the year’s big surprises may be found in junk bonds, which could “actually have decent returns,” reports […]

As people digest the changing Federal Reserve outlook, fixed-income investors may want to hold onto their municipal debt and bond-related exchange traded fund positions. “One area of the U.S. bond market that does merit attention is the municipal market,” according to Russ Koesterich, Global Chief Investment Strategist and Head of the Model Portfolio & Solutions […]

With the Federal Reserve intent on gradually normalizing interest rates and default risks rising, fixed-income investors may utilize inverse or short bond exchange traded funds to hedge their corporate debt exposure. Banks and investors are turning to alternative tools to hedge losses as credit markets grow more vulnerable to shocks from commodity prices, notably depressed […]

Junk bond-related exchange traded funds that that cover some of lowest-rated companies may be in for more pain ahead as distressed debt levels in the U.S. rise. According to ratings agency Standard & Poor’s, the number of companies with the lowest credit ratings and negative outlooks increased to 195 in December, the highest level since […]

With potential credit and rate risks weighing on the fixed-income markets, investors who are looking for higher yields may turn to an actively managed junk bond exchange traded fund that has outperformed more popular investment funds. The First Trust Tactical High Yield ETF (NYSEArca: HYLS), an actively managed ETF that tracks high-yield debt securities rated […]

Bond investors have witnessed heavy selling in U.S. speculative-grade debt as concerns mount, but international high-yield bond exchange traded funds may be exposed to less risks than the domestic fixed-income markets. European Central Bank asset purchases, assurances from the Federal Reserve that the rate hike will be gradual, attractive yields and relatively contained risks associated […]

With the Federal Reserve beginning to normalize its monetary policy, fixed-income investors may still generate decent yields while hedging against rate risk through a new breed of interest-rate-hedged or zero-duration bond exchange traded funds. Click the image below to head to youtube and check out the interview! The opinions and forecasts expressed herein are solely those […]

The recent sell-off in the speculative-grade debt market may open up a buying opportunity for junk bond-related exchange traded funds as some argue the selling was overdone. Over the past three months, iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) declined 5.9% and SPDR Barclays High Yield Bond ETF (NYSEArca: JNK) decreased 7.2%. Since […]

A Third Avenue junk bond mutual fund has halted investor redemptions, provoking concerns that this may be the canary in the high-yield fund coal mine. However, exchange traded funds that track speculative-grade debt are not exposed to the same level of risks. On Tuesday, Third Avenue Management LLC blocked investors from redeeming positions from the […]

The decline in the commodities space is stirring speculation that many heavily indebted commodity producers will go into default. Exchange traded fund investors, though, may hedge default risks with a credit default swaps strategy. ETF investors can hedge against the rising credit risk through a credit default swaps-related ETF, the ProShares CDS North American HY […]

Fixed-income investors have enjoyed generating attractive yields from their speculative-grade debt and junk bond exchange traded fund investments. However, many are now exposed to rising credit risks, especially as the Federal Reserve plans to hike interest rates. Year-to-date, the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK) saw $2.4 billion in net inflows and iShares […]

U.S.-listed exchange traded funds continued to attract billions of dollars in November as low-cost passive strategies enticed investors in a volatile market. Erik Oja, S&P Capital IQ equity analyst covering asset managers, argues that long-term trend away from active funds to passive funds was exacerbated during the recent volatility, with BlackRock benefiting the most from […]

Many have sought out speculative-grade debt securities to bolster yields in a low-rate environment but face growing default risks in light of the commodities rout. However, fixed-income investors may consider a smart-beta junk bond exchange traded fund that shows better credit risk exposure. The PowerShares Fundamental High Yield Corporate Bond ETF (NYSEArca: PHB), which tracks […]

As the markets brace for the Federal Reserve to begin hiking interest rates, bond exchange traded fund investors should thinking rate risk and ways to mitigate the negative effects higher rates. On the recent webcast, Fixed Income Strategies Ahead of the Fed, Scott Eldridge, Director of Fixed Income ETF Product Strategy at Invesco PowerShares Capital […]

Exchange traded fund investors are dumping Treasury bond exposure at their quickest pace in over a year ahead of rising expectations for the Federal Reserve’s first interest rate hike in almost a decade. In November, among the top ETF redemptions, the iShares 1-3 Year Treasury Bond ETF (NYSEArca: SHY) saw $1.4 billion in net outflows, […]

Rising default rates in the developing economies could foreshadow trouble ahead for emerging market bond exchange traded funds. Corporate default rates in the emerging countries are at their highest level since 2009 and up 40% year-over-year as companies struggle to meet obligations, especially as a strengthening U.S. dollar exacerbates the debt load for those that […]

For the first time since June, exchange traded funds are dumping their fixed-income holdings in droves ahead a potential December Federal Reserve interest rate hike. ETF investors yanked $1.2 billion from fixed-income funds in November, Bloomberg reports. Pushing bond ETF investors out the door, the Federal Reserve is expected to announce its first interest rate […]

Yield premiums on speculative-grade debt and junk bond exchange traded funds are steadily rising, reflecting increased default concerns ahead of the Federal Reserve’s expected interest rate normalization. Looking at the two largest junk bond ETFs, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) has a 6.62% 30-day SEC yield and SPDR Barclays […]

Some investors may have noticed deviations in the way junk bond exchange traded funds track benchmark indices. However, the perceived discrepancies in their respective tracking performances may be a result of indexing quirks. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) and SPDR Barclays High Yield Bond ETF (NYSEArca: JNK) are the […]

Some things go unnoticed. For example, the S&P 500 rallied 13% off its closing lows (1867) set in late August. Lost in the shuffle? The popular benchmark has yet to revisit its closing highs (2130) registered back in May. In essence, the corrective activity that began in the springtime as a function of a faltering […]

Speculative-grade, high-yield bond exchange traded funds have been among the most heavily traded fixed-income asset categories. While more investors have turned to junk bond ETFs, some may have noticed that the funds do not perfectly reflect benchmark indices. Some fund managers point out that junk bond ETF returns are lower than underlying indices they track, […]

After the Federal Reserve stated it was standing pat for the time being in and riskier assets began to rally off the recent selling, U.S. corporate bond exchange traded funds saw their largest monthly inflows ever. U.S. corporate debt-related ETFs saw $8.3 billion in inflows over October, reports Eric Balchunas for Bloomberg. High-yield corporate bond […]

Despite signaling a potential interest rate hike for December, the Federal Reserve’s overtures fell on deaf ears in the fixed-income market, with junk bond exchange traded funds largely ignoring the rate risks. Over the past week, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) and SPDR Barclays High Yield Bond ETF (NYSEArca: […]

Despite concerns about the economy and companies’ ability to repay their debt obligations, high-yield junk bond exchange traded funds are attracting more attention after the recent selling pressure pushed up yields and dissipating volatility helped drive investors back into riskier assets. So far this month, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: […]

Investors have increasingly turned to exchange traded funds as their go-to investment vehicle of choice for fixed-income exposure as liquidity in the underlying debt market dries up, especially after the new banking rules. For instance, investment-grade corporate bond ETFs attracted $7.7 billion in net inflows over the first nine months of 2015, according to S&P […]

Fixed-income investors may want to take a look at European junk bonds and international debt-related exchange traded funds to diversify an investment portfolio and generate attractive yields. While there are no U.S.-listed Europe region-specific bond ETFs available, investors can still gain exposure to the area’s high-yield bond market through international bond ETFs. For instance, the […]

Investors who are implementing a laddered fixed-income portfolio with varying maturities to better manage interest rate risk may take a look at two new Guggenheim Investments target-maturity bond exchange traded funds. Guggenheim recently added the Guggenheim BulletShares 2025 Corporate Bond ETF (NYSEArca: BSCP) and the Guggenheim BulletShares 2023 High Yield Corporate Bond ETF (NYSEArca: BSJN), […]

The Securities and Exchange Commission will have a heavy hand in the mutual fund industry, potentially adding new regulations that could raise costs for fund companies and setting up liquidity rules that may affect bond-related exchange traded funds. The SEC is will enact greater regulation over the $60 trillion money-management business, reports Daisy Maxey for […]