Helping the junk bond market is all the turmoil surrounding the European Union’s credit ratings. Investors are seeking a safe haven in the form of U.S. government bonds, thus pushing yields lower. Typically, higher government yields will attract investor money away from riskier junk bonds. [6 ETF Opportunities.]
In light of recent developments, Barclays reports that junk bonds may return 12% to 13% in price appreciation, up from an earlier forecast of 7% to 8%.
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Sumin Kim contributed to this article.