As stocks continue to rally, two other asset classes that have been doing very well lately are junk bonds and preferreds. Below are six-month price charts of the high yield (junk) bond ETF (NYSEARCA:HYG) and the preferred stock ETF (NYSEARCA:PFF). As shown, both have basically gone parabolic over the last few weeks, making new 52-week highs on a daily basis.
While high yield bonds and preferreds have been on big runs higher for quite a while now, it may surprise some to know that they're still well below their highs from before the financial crisis. Below are long-term charts of both HYG and PFF since the two ETFs were created back in 2007. As shown, HYG needs to gain another 10% to get back to its pre-financial crisis high, while PFF needs to gain another 23%.