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    ETF Spotlight: High-Yield Corporate Bonds

    Wed, 05/23/2012 - 13:28 EDT - Seeking Alpha
    • HYG
    • JNK
    • PHB
    • Tom Lydon

    By Tom Lydon:

    High-yield corporate bonds are one of the biggest stories in 2012 for the ETF business.First, investors scratching for yield have been piling into ETFs that invest in non-investment-grade or "junk" bonds.Also, a big trade in a junk bond ETF this month has some wondering if big investors will use ETFs more to avoid trading in the secondary market. There are also questions about how this activity could impact long-term investors in these ETFs."Corporate bonds are denoted as 'high yield' for the sole reason that firms issuing them are highly leveraged. Companies with this kind of leverage profile can get there either intentionally, as the result of a leveraged buyout, leveraged acquisition or recapitalization, or unintentionally because of a deterioration of the underlying business of an erstwhile investment-grade firm," John Gabriel wrote in a Morningstar analyst report.The high yield ofComplete Story »

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      By Tom Lydon: High-yield bond exchange traded funds have been popular options with income-starved investors in 2011, but the ETFs have been under pressure in recent weeks after a fierce rally from the October low. “Junk” bonds bounced last month on hopes the economy would avoid a recession and as the yield spread between Treasuries and high-yield bonds narrowed.

    • Searching For Yield In Fixed-Income ETFs

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    • High-Yield Bond ETFs In Huge Rally As Recession Fears Abate

      By Tom Lydon: Exchange traded funds that invest in high-yield corporate bonds have soared in October on signs the economy won’t slip into another recession as investors pile back into riskier assets.The rally has also been fueled by relief that European leaders have put together an agreement on Greek bond haircuts and beefing up the bailout fund. Investors flocked into the safety of U.S. Treasuries this summer amid the sell-off in equities and fears Europe’s debt crisis would explode.

    • Treasury-Hedged Junk Bond ETF Outperforms As Rates Rise

      By Tom Lydon: As investors rushed back to the fixed-income market this year, speculative-grade debt has been strengthening. However, with Treasury yields rising again, one rate-hedged junk bond exchange traded fund has been outperforming.

    • International High-Yield Bond ETFs For Income

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    • ETF Spotlight: High-Yield Corporate Bonds

      By Tom Lydon: ETF Spotlight on iShares iBoxx $ HY Corp Bond Fund (HYG), part of an ongoing series. Assets: $14.2 billion. Objective: The iShares iBoxx & High Yield Corporate Bond Fund tries to reflect the performance of the iBoxx $ Liquid High Yield Index, which is comprised of liquid U.S. dollar-denominated, high-yield corporate bonds.

    • High-Yield Bond ETFs Holding Their Ground Amid Rising Rates

      By Tom Lydon: High-yield, speculative grade, junk bond exchange traded funds hold up against other fixed-income assets in a rising interest rate environment.

    • High-Yield Bond Vs. Dividend ETFs

      By Tom Lydon: Investors are turning to junk bond and dividend ETFs for income in a low-rate environment. High-yield ETFs invest in bonds, while dividend funds target the stock market, so the two groups can perform differently.

    • High Yield Corporate Bonds: ETFs or Funds?

      Jim Pyke submits:Junk bonds, more euphemistically referred to as high yield corporate bonds, offer a good way to diversify an investment portfolio and create current income. These securities offer lower volatility than outright equity, but are lower in the capital structure and of lower credit ratings than invest grade debt. I previously wrote an article that focused on junk bond ETFs.

    • Claymore Plans Target Maturity Date Junk Bond ETFs

      Michael Johnston submits:Claymore, the Chicagoland-based ETF issuer apparently in the midst of reshaping its product lineup, now has plans to roll out a suite of target maturity date high yield corporate bond funds. According to a recent SEC filing, Claymore is seeking approval on nine funds with maturity dates beginning in 2012 and stretching through 2020. The proposed ETFs include:

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