SPDR Barclays Capital High Yield Bond (ETF) (AMEX:JNK)
CAPS Rating:
SPDR Barclays Capital High Yield Bond (ETF)
The Official Website of the Long-Term Investor
SPDR Barclays Capital High Yield Bond (ETF)
BATS data provided in real-time. NYSE, NASDAQ and AMEX data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates and Analyst Ratings provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions
RSS Headlines
Fool UK
Recs
Long bonds and junk bonds are both traps for people who are trying to play it safe by hiding in a bear's cave. Two problems concern me about these bonds. One, foreigners stop buying bonds, which nuc all the current bonds as interest rates jump. Two, the "recovery" is a recovery in name only and some of the companies who are issuing junk become junk.
Besides these two little problems I'm sure the return on investment is more than adequate (sarcasm).
Just to add to this... When interest rates jump a lot of the junk won't be able to pay higher interest rates for debt (which is why they were junk to begin with) creating increases in defaults.
Right ... But the beauty of a Junk Bond ETF is its liquidity. You are not married to one particular issue. You can get in and out fast. Also, the wide range of bonds it holds diversifys default risk. If things start tanking, you have a wider window of opportunity to evaluate the macro picture and get out. For 10% + it is a nice hedge.