Additionally, interest rates and the spread to the Treasury market are also factors that affect high-yield bonds. Currently, spreads on most higher-quality junk bonds are wider than their historical means.
It’s true that high-yield debt is among the riskiest types. If this is an uptrend you want to get in on, you can help mitigate this risk by implementing a simple strategy such as trend following, and/or set up trading alerts to be notified by email when a sell signal is reached.
For more information on high-yield bonds, visit our high-yield bonds category.
- iShares iBoxx $ High Yield Corporate Bond (NYSEArca: HYG): yields 7.77%
- SPDR Barclays Capital High-Yield Bond (NYSEArca: JNK): yields 8.44%
- PowerShares Fundamental High Yield Corporate Bond (NYSEArca: PHB): yields 6.82%
For full disclosure, Tom Lydon’s clients own shares of JNK.
Max Chen contributed to this article.