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.