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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Desire for income drives high-yield bond ETFs' popularity |
By John Spence, MarketWatch
BOSTON (MarketWatch) -- Investors fed up with U.S. stocks' negative returns over the past decade and paltry rates in today's fixed-income markets are piling into exchange-traded funds that invest in high-yield corporate bonds.
"Where else can you get an 8% yield? The S&P 500 (SPX 1,073, +1.11, +0.10%) is flat over the last dozen years," said Matt Hougan, head of ETF analytics at IndexUniverse. "I'm not surprised people are looking elsewhere on the capital spectrum."
Still, investors need to be wary of the higher risk in "junk" bonds, which can manifest itself in big price swings relative to other categories of bonds. Structurally, Hougan noted the high-yield bond ETFs can trade at "significant premiums" to their net asset values. ETFs following less-liquid markets can see wider trading spreads.
Two high-yield ETFs with large asset bases -- iShares iBoxx $ High Yield Corporate Bond Fund (HYG 87.66, -0.07, -0.08%) and SPDR Barclays Capital High Yield Bond ETF (JNK 39.01, -0.09, -0.23%) -- both saw year-to-date inflows of more than $1.2 billion through July, according to data from the National Stock Exchange. More cash likely moved in the door this month amid a surge in bond issuance from corporate America.
The high-yield bond ETFs rallied in 2009 on easing economic and credit concerns, but are essentially treading water so far this year. The SPDR Barclays Capital High Yield Bond ETF gained 37.7% in 2009, according to investment researcher Morningstar Inc., as worries over defaults and bankruptcies eased. The fund lost 24.7% in 2008 as the credit storm raged. Both ETFs are currently yielding around 8%.
Hunting for income
The growth in high-yield ETFs is part of a wider rush to bonds as investors look for income while economic uncertainty causes gut-wrenching swings in the stock market. For example, more than $5 billion flowed into iBoxx $ Investment Grade Corporate Bond Fund (LQD 112.11, +0.01, +0.01%) year to date through July 31. The ETF has a yield of 4%.
In the Treasury market, risk aversion and deflation fears are major factors pushing yields lower.
For the complete article visit MarketWatch
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| Stuff to look at |
Yield and Income Newsletter: A must have for income investors. subscribe NOW
S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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