Related: An Old Favorite Among Junk Bond ETFs
Corporate debt is reaching its highest level since before the financial crisis, which has caused Moody’s to warn that substantial trouble is ahead for junk bonds when the next downturn arrives.
Speculative-grade debt and junk bond-related exchange traded funds are attracting greater attention among yield seekers, but some institutions are warning investors to not go overboard with this risky asset.
Since 2009, the level of global non-financial companies rated as speculative or junk jumped by 58% to the highest level ever, with 40% at credit ratings B1 or lower, the point that Moody’s considers “highly speculative,” as opposed to “non-investment grade speculative.”
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