Seeking Alpha

Junk bond returns top 6% YTD

  • Most interesting as the returns from junk bonds cross 6% for the year (according to the BAML index), is Barron's Michael Aneiro noting the high-yield sector has never had a "coupon clipping" type of year, i.e. where the annual return is essentially the yield on the paper at the start of the year.
  • Instead junk bonds tend to greatly overshoot or undershoot their January return targets - in its 23-year history, the Barclays U.S. High Yield Index has never returned between 6% and 10% in a single calendar year.
  • The market came into 2013 with a 6.09% yield, so the 6% return through today is a bit ahead of target, but could end the year within that vicinity.
  • High-yield ETFs: HYG, JNK, PHB, HYLD, HYS, SJB, UJB, SJNK, ANGL, BSJG, BSJH, BSJI, QLTC, XOVR.
Comments (1)
  • So is anyone complaining? I'm certainly not. BTW, another excuse to avoid a bank.
    26 Oct 2013, 06:22 AM Reply Like
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