Jonathon Bernstein for The ETF Zone doesn’t exactly agree. Bernstein says that although it’s a good time for corporate bond issuers, investors should avoid such bonds. The problem as he sees it: yields are too low and the risks are too high.
But consider that the 10-year Treasury is yielding a paltry 2.48% and even the “low” yields on corporate debt still look appealing. Corporate bond ETFs are also well above their long-term trend lines, and as we often say: you can’t fight the trend.
Visit the corporate bond ETF category for more articles about corporate bonds.
- iShares iBoxx $ Investment Grade Corporate Bond (NYSEArca: LQD): yields 4.61%
- iShares iBoxx $ High Yield Corporate Bond (NYSEArca: HYG): yields 7.98%
- PowerShares Fundamental High Yield Corporate Bond (NYSEArca: PHB): yields 6.79%
- SPDR Barclays Capital High Yield Bond (NYSEArca: JNK): yields 8.42%
For full disclosure, Tom Lydon’s clients own shares of LQD and JNK.
Tisha Guerrero contributed to this article.