Fixed-Income ETFs for Yield: Junk Bonds, Emerging Markets and More | ETF Trends

The 10-year Treasury note is yielding an anemic 1.6% so it’s no wonder investors are scouring the bond ETF universe in search of income.

There are the obvious sectors such as high-yield corporate bonds. However, some fixed-income ETFs reside off the beaten path such as emerging market bond funds that might appeal to investors trying to boost yield in their portfolios. Editor Tom Lydon tells Investor’s Business Daily he likes SPDR Barclays Capital High Yield Bond ETF (NYSEArca: JNK).

The fund pays a dividend yield of 7% and holds total assets of $12.5 billion, according to manager State Street Global Advisors. JNK has a one-year total return of 21.3%, according to Morningstar. [High-Yield ETFs]

“Typically, speculative-grade bonds come with attractive yields because of their inherently riskier nature. However, default rates remain significantly depressed,” Lydon told IBD. “Meanwhile, corporate America is still sitting on a lot of cash, and balance sheets have been at their best in years.”

Daniel Weiskopf, managing director of Forefront, said his firm has overweight positions in Market Vectors High-Yield Muni ETF (NYSEArca: HYD), SPDR Barclays Capital Convertible Bond (NYSEArca: CWB) and PIMCO Total Return ETF (NYSEArca: BOND).

“The secondary market seems poised for municipal bond prices to move higher,” says James Colby, a portfolio manager and senior municipal strategist at Van Eck Global. [Muni Bond ETFs]