“That to me indicates that the net asset values on the high-yield ETFs in particular should drift down,” Tchir said.
The prices typically drift lower as the bonds shed coupon payments accrued each month. However, prices have been moving higher as investors keep piling in. Tchir argues that these ETFs “really cannot go much higher because of the portfolio they hold.” [High-Yield ETFs Eye Multiyear Highs; ‘Gravity’ About to Kick In?]
Other junk bond ETFs include:
- iShares iBoxx $ High Yield Corporate Bond (NYSEArca: HYG) 4.87% 30-day SEC yield
- SPDR BarCap Short Term High Yield Bond ETF (NYSEArca: SJNK) 4.19% 30-day SEC yield
- PIMCO 0-5 Year High Yield Corporate Bond Index (NYSEArca: HYS) 3.52% 30-day SEC yield
SPDR Barclays High Yield Bond
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.