Consequently, average yields on junk bonds have diminished almost 60 basis points over the past week — bond yields have an inverse relationship to bond prices, so a falling yield corresponds with rising prices.
“Income-hungry investors are once again willing to camp out in ‘Tornado Alley’ to collect a little extra yield,” Marty Fridson, chief executive at FridsonVision, said in the article. “[But] with memories of the last flight from high-yield bonds still fresh, the next one is likely to represent an even uglier scene of panic.”
iShares iBoxx High Yield Corporate 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 HYG and JNK.