Cracks Are Appearing in the Junk Bond Market: Distress Ratio Rises in June

Parsimony Investment Research submits:As investors clamor for yield in a low nominal interest rate environment, demand for high yield bonds (a.k.a. junk bonds) has increased since the market lows in 2009. However, recent money flow data for this asset class is signaling trouble ahead.

By The Financial Lexicon:Over the years, I have spoken to many investors who are comfortable selecting individual stocks for their portfolios but fear diversifying their fixed income allocation across individual bonds. For these investors, when it comes to bond investing, diversified funds have been the way to go. And they don't favor just any diversified funds, but they often invest in passive funds with hundreds of holdings tracking a particular index.

By The Financial Lexicon:In recent weeks, I've written analyses on two popular corporate bond ETFs, the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD) and the iShares iBoxx $ High Yield Corporate Bond Fund (HYG).

By The Financial Lexicon:The month of May was a tale of two parts for the high-yield corporate bond market. Early in the month, despite a sell-off in virtually all things "risk" related, "junk" bonds held up quite well. During the first two weeks of the month, the high-yield spread, as measured by the BofA Merrill Lynch U.S. High Yield Master II Option-Adjusted Spread, barely budged.

Jim Pyke submits:There are many articles that write about the benefit of high yield corporate bonds, formerly known by the term junk bonds. In addition to providing good yields, they provide additional diversification benefits. The easiest way for a casual investor to gain exposure is through mutual funds or ETFs. I'll focus on the latter.

Michael Johnston submits:PIMCO, the bond fund giant that has quickly become a major player in the fixed income ETF space, is looking to expand its ETF presence even further. The Newport Beach, California-based firm has filed for SEC approval on six new bond ETFs, including:

By The Financial Lexicon:Over the past couple weeks, several new corporate bonds were issued. Although the majority of the new issues are investment grade rated notes, there are some high-yield bonds (HYG) included in the bunch. I would like to present details on four of these corporate bonds.

By The Financial Lexicon:On Tuesday, Fitch downgraded J.C. Penney's (JCP) senior unsecured notes (as well as its Issuer Default Rating) to junk territory, sending them from BBB- to BB+.