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By Corey Hoffstein With the benefit of hindsight, there have been few investments as attractive as core U.S. fixed income over the last 30 years. Capital preservation, income, diversification, and even hedging volatility: was there anything fixed income did not provide? With 10-year U.S. Treasury rates nearing all-time lows, however, the cost/benefit math may be […]

Fixed-income ETF investors may want to favor riskier plays Investment-grade corporate bonds, high-yield debt and bank loans may boost returns while offering less volatility than stocks Bond investors interested in riskier investments with the promise of higher yields can turn to speculative-grade or junk bond ETFs With all the doom-and-gloom dissipating and the market rebounding, […]

Three months ago to the day (6/30), I served up a list of reasons for lowering one’s exposure to riskier assets. I discussed weakness in market internals where fewer and fewer corporate components of the Dow and S&P 500 had been propping up the popular U.S. benchmarks. I talked about the faster rate of deterioration […]

We typically spend a lot of time discussing flows in and out of the two largest and well-known U.S. High Yield Corporate Bond ETFs, HYG (iShares High Yield Corporate Bond, Expense Ratio 0.50%) and JNK (SPDR High Yield Bond ETF, Expense Ratio 0.40%) as they tend to command the lion’s share of inflows and outflows […]

Investors shouldn’t write off high-yield fixed-income assets and related junk bond exchange traded funds just yet as an expanding economy will help support this riskier segment of the debt market. “The reality is this economic expansion will likely continue for several more years, so with that as a backdrop we don’t see fundamentally the high-yield […]

While many anticipate a rising rate environment ahead, investors should not forgo fixed-income assets and bond exchange traded funds in a diversified portfolio. “We are in a potential rising-interest-rate environment, and initially this will have a negative impact on bond and equity markets,” R. M. Zalatimo, managing director, National Securities Corp., said in a CNBC […]

Due to ongoing uncertainty over the Federal Reserve’s interest rate outlook, fixed-income investors should stick to short-term bond exchange traded funds. Because of the potential volatility, “investors should be flexible and consider more liquid securities. Fixed income with shorter maturities is one starting place,” Bill Gross told Reuters. Specifically, Gross, who left PIMCO to manage […]

Following Bill Gross’ abrupt resignation from PIMCO, the bond manager he co-founded, speculation has swirled regarding asset flight from the firm and where some of that capital will head. Wall Street analysts have highlighted firms that could benefit from PIMCO client skittishness. The PIMCO Total Return ETF (NYSEArca: BOND) was a $3.7 billion fund a […]

Earlier this month, Charles Schwab (NYSE: SCHW), one of the largest discount brokers in the U.S., unveiled a significant expansion of its Schwab ETF OneSource commission-free exchange traded funds platform. Already substantial in terms of number of offerings, OneSource added 65 from various issuers to Schwab ETF OneSource, bring the number of commission-free offerings on […]

Amid increased regulatory scrutiny and tight supply in some corners of the fixed income market, institutional investors have not been shy about allocating billions of dollars to bond exchanged traded funds. While U.S. stocks have been, for the most part impressive this year, inflows to bond ETFs have impressed as well. No ETF has hauled […]

Buoyed by expectations that higher interest rates are not an imminent scenario, investors are returning to some of the largest high-yield bond ETFs even as yields drop. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG), the largest junk bond ETF by assets, pulled in $539 million worth of new assets last week, […]

Speculative-grade, or so-called junk bond exchange traded funds are attracting more attention as investors turn to the riskiest corporate debt, with default rates depressed and low interest rates on safer assets. Investors have picked up triple-C rated corporate debt – bonds that are considered highly speculative in nature, pushing down yields to 8.187% on the […]

Investors continue to be willing to accept country and credit risk with exchange traded funds as highlighted by last weeks flows data. Research firm EPFR Global notes that junk bond funds and funds with exposure to Italian equities were among the more impressive asset gatherers last week. When it comes to high-yield bond ETFs the […]

Usually, our look at the most searched exchange traded funds for a given week turns up some symmetry, even if it is on multiple fronts. For example, there have recently been weeks when several Russia ETFs are among the most searched funds on ETF Trends. And there have been instances when scores of dividend ETFs […]

Fixed income exchange traded funds were the dominant asset gatherers in the first quarter, but that trend reversed in April. Last month, ETFs hauled in $15.1 billion, more than half the year-to-date total, with equity funds leading the way. Although the iShares 7-10 Year Treasury Bond ETF (NYSEArca: IEF) is the only bond fund among […]

Amid speculation the Federal Reserve is inching closer to raising interest rates, investors are fleeing some longer duration high-yield bond exchange traded funds in favor of junk ETFs with less sensitivity to rising rates. Junk bonds, “traditionally favored during a period of rising interest rates, are seen more susceptible this time with the premium paid […]

High-yield, speculative-grade debt traders traditionally tapped into fixed-income assets over the phone, but with the advent of exchange traded funds, more are turning to the investment vehicle as their go-to source for junk bond exposure. Assets in the top 10 junk bond ETFs have expanded 24% since May 2012, reports Lisa Abramowicz for Bloomberg. “The […]

After being punished by soaring Treasury yields in 2013, some bond exchange traded funds are the toast of the town in 2014. Last month, investors pulled nearly $10 billion from exchange traded products after ETF inflows reached a record last year, topping $200 billion for the second consecutive year. Equity-based ETFs were the culprits, shedding […]

Select corporate bond exchange traded funds, both the investment-grade and high-yield varieties, have seen significant inflows since the start of 2014 even as investors have not been shy about pulling cash from ETFs focused on U.S. equities. U.S. equity ETFs are down $24.7 billion in assets from redemptions, with three products accounting for essentially the […]

The markets are experiencing a rough start to 2014 after a phenomenal 2013. However, investors can still capitalize in specific market segments. ETF Trends Publisher Tom Lydon appeared on FOX Business Friday to discuss opportunities in the high-yield, fixed-income space and potential growth overseas, specifically in Europe. Watch the FOX Business video to see the […]

We periodically highlight actively managed ETFs in this piece and have been since 2009 because we believe that they have legs in terms of future asset growth potential. Does every actively managed strategy immediately take off in terms of gathering assets and attracting the interest of asset managers and financial advisors? The answer is an […]

There are two primary risk elements involved with bond investing – rate risk and credit risk. Interest rate risk came into focus in the second quarter amid increased speculation about when the Federal Reserve could begin tapering its quantitative easing program. The tapering-induced rate risk caused a flight out of longer duration bonds and bond […]

Ten-year Treasury yields have soared 49% this year, inflicting damage on an array of long- and some medium-duration bond exchange traded funds in the process. Said another way, long duration Treasury and high-grade corporate bond ETFs have been whacked by rising rates. As Treasury yields have spiked, investors have not been shy about pouring cash […]

PIMCO and European provider Source expand on the popular high-yield, short-duration bond strategy with a London-listed, euro-hedged exchange traded fund version. According to a press release, the PIMCO EUR-hedged Short-Term High Yield Corporate Bond Index Source ETF (LSE: STHE) began trading on the London Stock Exchange Monday, Oct. 21. The new fund will provide euro-based […]

Junk bond exchange traded funds provide attractive yields, but the asset class category exposes investors to specific credit risks. The yield on speculative grade debt depends on the time horizon for when the bond is repaid and the creditworthiness of the issuer, writes John Waggoner for USA Today. As a junk bond, the debt security […]

Junk debt ETFs tracking bonds with shorter durations are finding a home in more portfolios as investors continue to scratch for yield but fret over the damaging impact of higher interest rates. For example, PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS) and SPDR Barclays Short Term High Yield Bond (NYSEArca: SJNK) have seen […]

With interest rates rising, more aggressive traders are using short or inverse exchange traded funds to capitalize on weakening Treasuries and fixed-income assets, but the instruments do not come without risks. Timothy Strauts, ETF analyst at Morningstar, points out that funds like the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) offers investors the opportunity to […]

Investors want yield but are concerned they could get hurt if interest rates rise. High-yield corporate bond ETFs with shorter durations provide a nice balance. Options here include PIMCO 0-5 Year High Yield Corporate Bond Index (NYSEArca: HYS), which has attracted a little over $1 billion in new assets year-to-date. SPDR Barclays Short-Term High-Yield Bond […]

High-yield bond exchange traded funds held their ground Friday after a dismal employment report even though some wealth managers are warning investors that the current yields no longer justify the risks involved. In any case, investors should keep an eye on speculative-grade corporate debt for warning signs in the credit markets that investors are losing […]

Junk bond ETFs such as SPDR Barclays High Yield Bond (NYSEArca: JNK) are trying to break out to their highest levels since the financial crisis. However, there are lingering fears about credit and interest-rate risks in high-yield debt ETFs, with some analysts saying it’s mathematically impossible for the funds to increase much further in price. […]