James Keenan, comanager of the BlackRock High Yield Bond fund, loves disarray in the markets.
International High Yield Bond shares are currently trading down about 0.3% on the day.
Anyone seeking a bid on a high yield bond had to be prepared to wince.
Consider a high yield exchange-traded fund like the Barclays High Yield Bond SPDRS ETF (NYSE: JNK).
The high yield bond market gets my money with its 500 basis points spread over 10-year Treasuries.
On the face of it, these findings imply that high yield bond funds should concentrate their holdings in fallen angels.
Almost all the media coverage has the following chart, or similar stats regarding the inflows into high yield bond funds.
High yield bond spreads soared in 2008 by more than 400% to more than 700 basis points over Treasurys before declining in 2009.
FORBES: Betting On High Yield Bonds To Beat Equities In 2012
According to the methodology employed by certain Wall Street analysts, the high yield bond market is currently pricing in an 8% default rate.
If leveraged loan and high yield bond issuance continues at the current pace the leveraged finance market would see its first trillion dollar year.
FORBES: Leveraged finance volume sees record pace as M&A deals boom
If you believe the U.S. economic recovery remains on track, high yield bond funds and ETFs may be good vehicles for acting on your conviction.
The return on high-yield bonds according to the Merrill Lynch High Yield Bond Index is the highest it has ever been, at 7%, up 2.9% year-to-date.
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The chart of the SPDR Barclays Capital High Yield Bond ETF ( JNK) shows the drop through weekly support from the fall of 2010 (line e).
He and the firm created almost out of whole cloth the high yield bond market that financed so many cutting-edge corporate entities in the 1970s and 1980s.
Indeed, after evenly splitting the leveraged finance pie in January there was roughly twice as much loan volume last month as there was high yield bond issuance.
FORBES: Leveraged finance volume sees record pace as M&A deals boom
The junk bond market has lost much of its allure, as the SPDR Barclays Capital High Yield Bond ETF ( JNK) has had a rough few months.
Finally, we get to the high yield bond market which stalled out this past quarter on fears of decelerating GDP momentum, even a double dip recession in the wings.
Stephen Leeb , editor of Personal Finance, recommends taking a chance on junk bonds via a well-managed fund like the PIMCO High Yield Bond Fund ( PHDAX) .
At the same time the reports say that high yield bond issuance in dollar terms has never been higher, and yields on junk bonds have never been lower.
This year through the end of October, the SPDR Barclays Capital High Yield Bond ETF (JNK) and the iShares iBoxx High Yield Corporate Bond (HYG) are up 12.6% and 10.1%, respectively.
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The chart from The Wall Street Journal shows the dramatic rise of the Barclays US Corporate High Yield Bond Index in 2012, and the further gains in early 2013.
Example: You are young and have a pot of retirement money divided equally between the Putnam Equity Income Fund (annual expenses, 1.32%) and the BlackRock High Yield Bond Fund (1.28%).
Just take a look at what happened to the SPDR Barclays High Yield bond ETF ( JNK) compared to the high-quality Vanguard Total Bond ETF ( BND) during the heart of the last recession.
We also continue to own some traditional bonds funds, such as PIMCO Total Return Fund, in addition to other income-oriented investment vehicles such as the Nuveen High Yield Bond Fund, which yields more than 7%.
Shares of JNK have a positive edge in the short-term of just over three quarters of a percent, significantly higher than its rival, high yield bond ETF, the iBoxx High Yield Corporate Bond Fund (NYSE: HYG).
Maybe, these honchos allocate 10 percent of their boodle to art, another 10 percent to gold, 30 percent to emerging markets and the remaining 50 percent to the Big Board, venture capital, real estate and high yield bond plays.
High yield bond funds like Janus High-Yield (JAHYX) or Fidelity High Income (SPHIX) have consistently performed better than high yield ETFs like SPDR Barclays Capital High Yield ( JNK) and iShares iBoxx High Yield ( HYG) and with less volatility.
The longest available series for high-yield bond returns is the Merrill Lynch 100 High Yield Index.
There are people who will reach for yield either by going to a high-yield bond fund or maybe a long-term bond, but those, for me, pose a little bit too much risk.
Two high-yield bond funds Appel is still holding: Northeast Investors Trust ( NTHEX) and Federated High-Yield Trust ( FHYTX) .
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