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%.