Weakness in U.S. stocks and many commodity markets along with the latest chapter in the Eurozone debt crisis have many investors on edge. However, high-yield corporate bond ETFs aren’t sending any bearish signals yet from the debt market.
In fact, ETFs that invest in U.S. “junk” bonds have been very resilient in recent months in the face of volatile markets. [High-Yield Bond ETF Sees Volume Spike]
In stocks, the S&P 500 “has been fairly weak of late” while high-yield funds such as SPDR Barclays Capital High Yield Bond ETF (JNK - News) are “reflecting relative strength,” says Chris Kimble at Kimble Charting Solutions. [Waiting Out the Stock Market with Preferred, High-Yield ETFs]
“In the past, relative strength in this complex was a good sign for the stock market going forward,” he said. [High-Yield Bond ETFs Come with Risks]
JNK has a dividend yield of 7.3%.
Other U.S. high-yield corporate bond ETFs include iShares iBoxx High Yield Fund (HYG - News), PowerShares High Yield Corporate (PHB - News) and PIMCO 0-5 Year High Yield Corporate Bond (HYS - News). [Why Emerging Market Corporate Bond ETFs are Hot]
SPDR Barclays Capital High Yield Bond ETF
Chart Source: Kimble Charting Solutions