Income seems to be in short supply these days, so wherever
exchange traded fund (
) investors can get it, that's where they're going. One such hot
spot is junk bond ETFs.
In that search for income, be careful.
John Spence for MarketWatch reports that
investors need to be wary of the higher risk in "junk" bonds:
We believe high-yield bond funds are one asset class to watch
over the next year or so. This is an opportunity or maybe a trade
where you can move into something that's going to produce higher
income. In this market, it's tough to find a decent yield, because
most investments are currently paying very little (10-year
treasuries currently yield less than 3%).
Given last quarter's strong corporate earnings and lower default
rates among companies, high-yield bond funds could be an attractive
For more stories about corporate debt,
visit our corporate bond ETF page
iShares iBoxx $ High Yield Corporate Bond (NYSEArca:
SPDR Barclays Capital High-Yield Bond (NYSEArca:
PowerShares Fundamental High Yield Corporate Bond
Tisha Guerrero contributed to this article.