“Liquidity is the main reason that we’re using high-yield ETFs right now rather than high-yield bonds,” Tim Anderson, chief fixed-income officer at RiverFront Investment Group LLC, said in the Bloomberg article. “In the good old days you could call up one of the major firms and there’d be a halfway decent shot you could sell $15 million, $30 million of bonds to them on the line. They’re not keeping the same inventories anymore.”
“ETFs have increasingly become a more viable way to express credit views,” Eric Gross, a credit strategist at Barclays Plc, said in the article. “We’ve seen corporate bond liquidity go down across both investment grade and high yield.”
Some other high-yield, junk bonds include the PowerShares High Yield Corporate (NYSEArca: PHB) and PIMCO 0-5 Year High Yield Corporate Bond (NYSEArca: HYS).
SPDR Barclays Capital High Yield Bond ETF
For more information on high-yield debt, visit our high-yield bonds category.
Max Chen contributed to this article.