Moreover, riskier high-yield debt may also be vulnerable ahead of a potential government shutdown next week.

Alternatively, fixed-income investors can also hedge their corporate debt exposure with an inverse high-yield ETF. For instance, the ProShares Short High Yield ETF (NYSEArca: SJB) takes the inverse -1x or -100% daily performance of the Markit iBoxx $ Liquid High Yield Index, SJB has increased 2.0% over the past week and 4.1% over the last three months.

ProShares Short High Yield ETF

For more information on the speculative-grade debt market, visit our junk bonds category.

Full disclosure: Tom Lydon’s clients own shares of HYG and JNK.

Max Chen contributed to this article.

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