The rally has pushed the average yield on speculative grade bonds below 6% for the first time ever, reports Michael Aneiro at Barron’s.
“All of this has been enabled by the Federal Reserve’s ongoing efforts to pin down short-term interest rates near zero and force investors into riskier, higher-yielding asset classes, creating a barren, yield-free investing landscape in which ‘high yield’ now officially means less than 6%,” Aneiro writes.
Global high yield bond issuance rose 38% in 2012 to a record $395 billion, The Motley Fool reports.
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Full disclosure: Tom Lydon’s clients own HYG and JNK.