Junk bonds continue party in 2014

|By:, SA News Editor

Even though junk bonds entered 2014 sporting puny yields, they've continued to fly through the end of February, returning 2.76%. The average yield is now just 5.2% - 40 basis points below where is started the year - and the average spread to Treasurys has dipped to a post-crisis low of 3.81%.

"This can't go on forever," says Barron's Michael Aneiro (not the first time he's sounded a warning). "This all depends on ultra-low interest rates, which allow junk-rated companies to refinance their debts indefinitely while pushing investors into riskier types of bonds."

The two most popular ETFs, HYG and JNK are relatively unscathed on this risk-off day, -0.1% and 0.3%, respectively.

ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, ANGL, XOVR, HYLS, THHY, UJB, SHYG, QLTC, HYZD, HYND