“If you hope to gain more income by increasing your allocation to higher-yielding bonds or dividend-paying stocks, you should be aware that your portfolio volatility will likely increase as a result,” says Vanguard Chief Economist Joe Davis. [No Free Lunch: The Risks of Dividend ETFs]
While ETFs represent 2% of the $1 trillion in U.S. corporate speculative-grade debt outstanding, they comprised over a third of the total $14.8 billion of inflows this year to mutual funds and ETFs that invest junk bonds, Bloomberg reported.
“ETFs are giving people a fair degree of comfort, providing them with daily transparency and the ability to see a trade in and out, and asking for relatively low fees,” said Peter Tchir of hedge fund TF Market Advisors, in the article.
iShares iBoxx High Yield Corporate Bond