The largest exchange traded fund for “junk” bonds is on an eight-day winning streak, suggesting investors remain in a risk-on mindset.
High-yield bond ETFs continue to rise despite growing calls the stock market needs to pull back or consolidate to digest some of the strong gains so far in 2012.
Some technical analysts watch junk bond ETFs such as iShares iBoxx High Yield Corporate Bond (NYSEArca: HYG) and SPDR Barclays High Yield Bond (NYSEArca: JNK) as a sentiment indicator for how comfortable investors are with taking on risk.
The ETFs offer yields of about 7%. From a performance standpoint, they are up more than 7% over the past three months.
Both funds have over $10 billion in assets, and they are among the top ETF sellers this year. [High-Yield Bond ETFs See Record Inflow]
Investors are using the junk bond ETFs to boost income with U.S. Treasury bonds offering puny yields.