High-yield, speculative-grade bond exchange traded funds have been losing ground and are trading close to a four-year low.

Over the past three months, the iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) dipped 3.2% and SPDR Barclays High Yield Bond ETF (NYSEArca: JNK) fell 3.7%. HYG is now trading near its lowest since the May 2012 close. Additionally, JNK has moved toward its lowest since its November 2011 close.

ETF investors have trimmed their junk bond exposure, fueling the sell-off. Over the past week, HYG  saw $443.2 million in net outflows while JNK experienced $271.2 million in outflows, according to ETF.com.

According to Bank of America, the selling pressure has pushed speculative-grade debt yields above 6% for the first time this year, reports Ellie Ismailidou for CNBC. Bond prices and yields have an inverse relationship, so falling prices correspond to higher yields.

HYG shows a 4.17 year duration and a 5.97% 30-day SEC yield. JNK has a 4.3 year duration and a 6.31% 30-day SEC yield.

Dragging on the speculative-grade bond space, low-rated energy bonds have been dropping on default fears in light of the falling oil prices. The Royal Bank of Scotland projects that U.S. default rates could double from about 2% to 4% by the end of the year. UBS has warned that distress in energy bonds can spread to other areas of the high-yield market as some companies are exposed to the resulting investment decline and job losses. [High-Yield Bond ETF Risks]

The junk bond ETFs also include significant tilt toward the energy sector. For example, HYG holds 13.5% in energy bond issuers.

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