JNK and HYG are yielding around 5%.
While spreads between high-yield debt and Treasuries have shrunk, David Sherman, founder of Cohanzick Management, believes that high yield debt will perform better than other fixed-income assets in a rising rate environment, reports Joy Ferguson for Reuters.
“Even though junk-bond yields are at historic lows, the spread over central bank manipulated Treasuries is reasonable and should provide some cushion in a rising rate environment,” Sherman said in the article.
iShares iBoxx $ High Yield Corporate Bond Fund
For more information on speculative grade debt, visit our junk bonds category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own JNK and HYG.