High-yield or “junk” corporate bond exchange traded funds (ETFs) have erased the sell-off they suffered in March.
High-yield funds have moved back above their key 50-day moving average line, which suggests investor optimism in the stock markets is relatively high for the short-run, notes Kimble Charting Solutions.
More high-profile investors are voicing bearish concerns about Treasuries and some are saying the multi-decade bull market in U.S. government bonds is ending. Additionally, the renewed bullish outlook for the equities market has attracted risk seeking investors to high-yielding corporate bonds.
High-yield corporate bond ETFs include:
- iShares iBoxx $ High Yield Corporate Bond (NYSEArca: HYG). HYG tries to reflect the performance of the iBoxx $ Liquid High Yield Index, which is a corporate bond market index. The fund has an expense ratio of 0.50% and a 7.90% yield.
- PowerShares Fundamental High Yield Corporate Bond (NYSEArca: PHB). PHB tries to reflect the performance of the RAFI High Yield Bond Index. The fund has an expense ratio of 0.50% and a 7.14% yield.
- SPDR Barclays Capital High Yield Bond (NYSEArca: JNK). JNK tries to reflect the performance of the Barclays Capital High Yield Very Liquid Index. The fund has an expense ratio of 0.50% and an 8.24% yield
In comparison, the iShares iBoxx $ Investment Grade Corporate Bond (NYSEArca: LQD) has an expense ratio of 0.15% and a 12-month yield of 4.83%.
For more information on high-yield bonds, visit our high-yield bonds category.
iShares iBoxx $ High Yield Corporate Bond
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.