SPDR Barclays Capital High Yield BondJNK

ETF Research and Analysis

by Scott Burns
Suitability

We consider investing in high-yield corporate bonds to be similar to investing in the equities of companies with highly leveraged balance sheets. As such, an investment in high-yield bonds or an ETF with a high-yield focus like   Read more 

Bull Case

SPDR Barclays Capital High Yield Bond gives investors diversified exposure to the high-yield bond market.
This fund has low costs relative to actively managed funds. Read more 

Bear Case

High-yield bonds have been hammered in the recent credit crisis. Credit spreads have widened to all-time highs.
We expect high-yield corporate default rates to double over the next several quarters as a result of a debt hangover at corporate borrowers coupled with a deep economic recession.  
The disruptions in the credit markets have caused this fund to trade at significant premiums and discounts to its NAV over the past several quarters. Read more 

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