Companies, though, have been hoarding money after the 2008 crisis sent everyone into risk-averse mode. Consequently, American companies have been managing their cash conservatively.
“Credit risk in terms of the magnitude of credit risk right now is very low,” Kaufman said. “The funding is freely available to them. The capital markets are wide open. They’re refinancing their debt at decreasingly low rates.”
Additionally, default has decreased dramatically as corporations refinanced their debt at lower rates.
“I think at this point, credit risk is at the low end of the historical spectrum,” Kaufman added.
High-yield bond ETFs include:
- SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK)
- iShares iBoxx High Yield Fund (NYSEArca: HYG)
- PowerShares High Yield Corporate (NYSEArca: PHB)
- PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS)
For more information on high-yield debt, visit our high-yield bonds category.
Max Chen contributed to this article.