In bond ETFs, the recent action in funds tracking Treasuries and high-yield corporate bonds suggests investors are growing more comfortable with risk as stocks rally.

The Dow was up 150 points in afternoon trade Tuesday.

Meanwhile, safe-haven Treasury ETFs sold off as yields rose along with equities. [ETF Chart of the Day: U.S. Treasuries]

The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) slipped more than 1%. The ETF, which focuses on long-term U.S. government debt, has backed off its record high in June. [Will ‘Mad Rush’ to Bond ETFs End in Tears?]

Meanwhile, in corporate junk bonds, SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK) and iShares iBoxx High Yield Fund (NYSEArca: HYG) rallied nearly 1% on Tuesday. [Why Trading in High-Yield ETFs is Booming]

The high-yield ETFs are climbing back over the 50-day moving average.

“The markets have been very choppy, but investors have been looking to buy this asset class on dips, and we have just had a big dip,” said Keith Bachman, head of U.S. and global high yield at Aberdeen Asset Management, in a recent Dow Jones report. Investors are trying to “take advantage of the asset class” because it has “very little in the way of default risk,” he said. [High-Yield ETFs Stem the Bleeding]

Along with the move higher in stocks, the recent trading in currency and volatility-linked ETFs is encouraging for the bulls. Sentiment was bearish heading into the rally and many funds are underinvested due to concerns over the Eurozone debt crisis and weak U.S. jobs data.

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