SPDR Barclays Capital Short Term High Yield Bond ETF(SJNK)- NYSEARCA
  • Jun. 10, 2014, 11:46 AM
    • It was May 2013 when the yield on BAML's benchmark index slipped below 5% for the first time ever, after four months earlier falling below 6% for the first time ever. What happened next was a bear market in fixed income which sent yields on all instruments sharply higher.
    • This year's big bull run for fixed-income has brought 5% back into play, with the yield on the BAML index sliding to 5.002% this morning. Junk bonds (HYG, JNK) have already delivered a return of 5.16% YTD, and now yield just 350 basis points more than comparable Treasurys.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, SJB, HYHG, ANGL, HYLS, UJB, XOVR, THHY, SHYG, QLTC, HYGH, HYND, HYZD
    | Jun. 10, 2014, 11:46 AM | 9 Comments
  • May 21, 2014, 12:01 PM
    • No longer "way overvalued," junk bonds are "way, way overvalued," says Martin Fridson, estimating fair value of the BAML high-yield index at 570 points over Treasurys vs. the current level of just 376 basis points.
    • He says high-yield has been in extremely overvalued territory for seven straight months, the longest streak in history. "Investors are accepting excessively small compensation for credit risk, so desperate are they to boost their yields. High-yield portfolio managers are not unaware of the inadequacy of spreads, but are willing to skate on thin ice on the assumption that the Fed is committed to rescuing them if anything goes wrong."
    • GMP Securities' Adrian Miller, meanwhile, is in agreement on overvaluation, but says - more or less - you've got to dance while the music's playing. A "repricing event," says Miller is not on the near-term radar.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, HYHG, BSJG, BSJI, ANGL, HYLS, UJB, BSJH, XOVR, THHY, SHYG, QLTC, BSJK, HYZD, HYND, BSJJ
    | May 21, 2014, 12:01 PM | 3 Comments
  • May 12, 2014, 12:50 PM
    • The average junk bond yield of 5.18% is higher than the all-time low of 4.93% hit exactly one year ago, but valuations may be even richer now, says Citi.
    • First off, Treasury yields are higher today, meaning spreads are narrower than they were last year. Secondly, current yields have been sustained at these low levels for a much longer period of time than last year. Citi also notes May has been a seasonally weak period for high-yield ever since the financial crisis.
    • "Will elevated valuations and the calendar turning to May cause the bears to come out of hiding," asks Citi. "To be honest, it’s been very difficult being a bear in this market. The relentless Treasury rally has caught us by surprise."
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, ANGL, HYLS, UJB, XOVR, THHY, YPRO, QLTC, SHYG, HYND, HYZD
    | May 12, 2014, 12:50 PM | 2 Comments
  • Apr. 28, 2014, 12:27 PM
    • The quest for yield as it relates to the bidding up in junk bond prices will end in tears, says JPMorgan strategists, but not until at least next year. Defying the bears, high yield prices continue are heading higher this year, and - putting its finger in the wind - Barclays late last week lifted its full-year return forecast to 5.5-6% from 3.5%.
    • The team takes note of the spread to Treasurys - it's fallen to 345 basis points, already below the firm target of 350. "Although some of the incremental risk-taking could cause some challenges in the medium to long term, we do not see cause for concern in 2014 and believe high yield will continue to be well supported."
    • The shorts? The volume of borrowed shares on BlackRock's HYG soared to an all-time high of $3.6B at the end of last month. For State Street's JNK, short bets neared $1.3B, also a record.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, ANGL, HYLS, UJB, XOVR, THHY, QLTC, SHYG, YPRO, HYND, HYZD
    | Apr. 28, 2014, 12:27 PM | 1 Comment
  • Apr. 25, 2014, 12:59 PM
    • The junk-bond market may be a bit frothy at the moment, but the real risk for high-yield paper is not a quick uptick in defaults, says Fitch, but instead that interest rates in general move higher. Interest rate volatility has been dormant thus far this year, but Fitch - looking back almost exactly one year - reminds about how quickly it can return.
    • As for credit: "Fitch recognizes the currently high issuance volumes and historically low yields in the leveraged finance space. However, in the view of Fitch’s Corporates team, we do not see a great deal of breakdown in credit discipline despite diminishing returns." The team also notes that while deal volume has picked up, it remains smaller than that of 2006-07 LBO boom, and the size, volume, and quality of today's transactions are "collectively less risky" than those of the previous cycle.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, ANGL, HYLS, UJB, XOVR, THHY, SHYG, YPRO, QLTC, HYND, HYZD
    | Apr. 25, 2014, 12:59 PM | 1 Comment
  • Apr. 23, 2014, 12:52 PM
    • In what may or may not end up being a bell-ringer of a deal, French cable company Numericable finalizes its record €7.9B junk bond offering, reportedly pricing the yield even lower than the initial whisper numbers. The size blows past the previous record - Sprint's $6.5B issuance last year.
    • This deal is spread over €2.25B of euro-denominated paper, $7.75B of dollar-denominated, and across three tranches of varying maturities.
    • RBS's Albert Gallo: “The new deal highlights strong growth in the European high-yield bond market, which has grown fivefold over the past five years to nearly €300B . . . Despite the strong supply, we expect European high-yield spreads to continue to tighten over the year, on recovering growth, easy ECB policy, stable fundamentals and low default rates.”
    • The proceeds are to be used to fund Altice's (Numericable's parent) purchase of Vivendi's telecoms business.
    • Previously: Largest junk-bond deal ever on tap
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, IHY, ANGL, HYXU, PGHY, HYLS, UJB, XOVR, THHY, YPRO, SHYG, QLTC, IJNK, HYND, HYZD
    | Apr. 23, 2014, 12:52 PM
  • Apr. 22, 2014, 2:57 PM
    • It may not be the peak, but it's a lot closer to the top than the bottom. Europe's lagging - compared to the U.S. - junk bond market is about to see a $11.6B sale by French cable company Numericable Group. It would be the largest junk-bond sale ever both in Europe and the States.
    • Numbericable is a subsidiary of Altice, which will be using the proceeds to fund its purchase of Vivendi's telecoms business SFR. The deal was originally supposed to consists of a €5.6B bank loan and a smaller offering, but the bank part has pulled back and the high-yield issuance grown.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, IHY, ANGL, HYXU, PGHY, HYLS, UJB, XOVR, THHY, YPRO, SHYG, QLTC, IJNK, HYND, HYZD
    | Apr. 22, 2014, 2:57 PM
  • Apr. 22, 2014, 11:55 AM
    • Maybe surprising to many, long-dated investment-grade corporate bonds are outperforming junk bonds this year, with total returns already of 7.48% vs. junk at 3.3%. It's a turnaround from 2013, when high-yield returned 7.42% vs. a loss of 1.57% for IG paper.
    • It's good news for institutional investors like pension funds and insurers, who have been big buyers of the bonds in recent months.
    • Investment-grade corporate debt ETFs: LQD, VCSH, VCIT, VCLT, CORP, CSJ, CIU, CFT, SCPB, LWC, CLY, ITR, QLTA, IGHG, PFIG, SLQD, IGS, CBND, IGU, QLTB
    • In other junk bond news, DoubleLine's Bonnie Baha says the firm's core fund has cut its high-yield exposure to 3% from 6%. High prices are the reason, says Baha, noting the average price of 104.5 cents on the dollar. Many issuers can force redemptions at 103 cents, and if they don't get called, in a low-rate environment there's extension risk.
    • Baha takes note of the proliferation of short-duration high-yield funds. "It's a fallacy to think that just because it’s short-term that bad things can’t happen."
    • High-yield ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, BSJI, ANGL, HYLS, UJB, BSJH, XOVR, THHY, YPRO, SHYG, QLTC, BSJK, HYZD, HYND, BSJJ
    | Apr. 22, 2014, 11:55 AM
  • Apr. 16, 2014, 11:11 AM
    • At 1.7% at the end of Q1, the U.S. junk bond default rate is off from 2.2% at the end of 2013, and at the lowest level since February 2008, according to Moody's. With the market yielding an average of just 5.2% (prior to 2012 it had never been below 6.5%), the default rate better stay low.
    • Moody's sees the default rate rising to 2.4% by year's end and 2.7% one year from now - both still well below the 20-year average of 4.5%.
    • It's not necessarily a booming economy, but instead welcoming debt markets which allow low-rated issuers to refinance at extended maturities and lower rates.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, BSJI, ANGL, HYLS, BSJH, UJB, XOVR, THHY, SHYG, QLTC, BSJK, HYZD, HYND, BSJJ
    | Apr. 16, 2014, 11:11 AM
  • Apr. 10, 2014, 10:39 AM
    | Apr. 10, 2014, 10:39 AM
  • Apr. 8, 2014, 2:51 PM
    • "There are segments of the high-yield market that do not compensate you for the risk you are taking by owning them," says BlackRock portfolio manager Michael Fredericks. Average spreads to Treasurys have fallen to just 352 basis points, the lowest since prior to the financial crisis.
    • There's still value, insist some managers, you just have to know where to look. "The game has changed in the high-yield market and it has become more sophisticated than it was two or three years ago," says another fund manager. Barclays chief of credit strategy Brad Rogoff, for instance, is spotting value in the high-yield paper sold by mining and retail companies, as well as the dollar-denominated bonds sold by European companies. The so-called "yankees" are on average cheaper than the boarder market, he says.
    • Another option is that of emerging market high-yield debt, with average yields of 7.6% more than 200 basis points higher than that of U.S. paper.
    • Related ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, IHY, EMHY, HYEM, BSJI, HYXU, ANGL, PGHY, HYLS, XOVR, UJB, BSJH, THHY, IJNK, SHYG, QLTC, BSJK, HYZD, HYND, BSJJ
    | Apr. 8, 2014, 2:51 PM | 2 Comments
  • Mar. 31, 2014, 7:53 AM
    • After pouring money into U.S. Treasury ETFs in the first two months of the year, investors pulled $10.3B in March, the largest amount withdrawn since December 2010, according to Bloomberg. The $7.86B iShares 1-3 Year Treasury Bond ETF (SHY) is the leader on a percentage basis - losing one-third of its AUM this month.
    • The catalyst is clearly the FOMC's signal on rate hikes beginning in about a year. “When the market thinks the Fed is going to raise rates, they don’t tend to stick around in short-dated bonds,” says global macro strategist Thomas Higgins.
    • Short-duration Treasury ETFs: SHY, BIL, SHV, VGSH, SCHO, DTUL, SST, DTUS, TUZ
    • In other areas of fixed income, inflation--linked bond ETFs had their first inflows in 19 months, and investors continue to plow money in high-yield.
    • TIPs and junk ETFs: HYG, JNK, TIP, HYLD, HYS, SJNK, PHB, VTIP, IPE, SCHP, SJB, STPZ, LTPZ, TIPZ, HYHG, STIP, ANGL, HYLS, XOVR, THHY, UJB, TPS, SHYG, QLTC, TDTT, TIPX, HYZD, TDTF, HYND, SIPE
    | Mar. 31, 2014, 7:53 AM
  • Mar. 12, 2014, 2:56 PM
    • The average covenant-quality score for high-yield bonds deteriorated to 4.36 in February from 3.84 one month previous (ranking is from 1 to 5, with 5 the weakest). It's the lowest print since Moody's began tracking the gauge in January 2011.
    • The decline was driven by a near-record percentage of high-yield-lite bonds - 39% of issuance in February vs. just 10% in January. “These bonds lack a debt incurrence and/or a restricted payments covenant and automatically receive our weakest score of 5.0," says Moody's Evan Friedman.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, BSJI, ANGL, BSJH, HYLS, XOVR, THHY, UJB, QLTC, SHYG, BSJK, HYZD, BSJJ, HYND
    | Mar. 12, 2014, 2:56 PM
  • Mar. 12, 2014, 8:42 AM
    • "There's no way for prices to go up at this point," says Jeff Gundlach of the junk bond market. The average junk bond yields just 5.3% and trades above 104 cents on the dollar, he says, higher than the 103 level at which many bonds can be called by their issuers.
    • “If a bond is priced to call, and rates rise, it might not get called. People may think they own a short-term portfolio but if interest rates rise it might turn into a 10-year bond instead. It would also roll up the yield curve ... This could be a debacle."
    • I’m not worried as much about interest rate risk and credit risk ... I’m worried more about liquidity risk and naively owned positions."
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, BSJI, ANGL, BSJH, HYLS, XOVR, THHY, UJB, QLTC, SHYG, BSJK, HYZD, BSJJ, HYND
    | Mar. 12, 2014, 8:42 AM | 1 Comment
  • Mar. 11, 2014, 1:37 PM
    • High-yield investors should take little comfort from a low default rate (with most forecasting for that to continue), says Martin Fridson, reminding the default rate in 2007 was 0.975%, but junk suffered a 5.6% price drop that year.
    • The commonly held belief that high-yield total return equals yield minus default loss is "essentially irrelevant over a one-year horizon" in that it assumes the bonds which default in any given year began the year at par. In truth, the vast majority of any year's defaults began the year as distressed paper with spreads to Treasurys of 1K basis points or more.
    • "Investors are ill-served by overly simplistic analysis implying that mid-double-digit returns are a sure thing as long as the default rate remains below average.  The high-yield market has proven that it is quite capable of generating substantial price declines even in the face of extremely low default rates and declining Treasury yields."
    • Yesterday: Junk-bond default rate slides to just 1.6%.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, BSJG, HYHG, HYEM, IHY, EMHY, BSJI, HYXU, ANGL, PGHY, BSJH, HYLS, XOVR, THHY, UJB, QLTC, SHYG, BSJK, HYZD, BSJJ, HYND
    | Mar. 11, 2014, 1:37 PM
  • Mar. 10, 2014, 1:01 PM
    • February's 1.6% is off from an already-low 1.9% in January, but Moody's see it rising to 2.3% by year's end. The historical average since 1983 is 4.7%. Globally, the default rate fell to 2.4% in February from 2.6% previously, and Moody's sees a further decline this year to 2.1%.
    • The default rate better stay low - the junk market yields just 5.34% on average and the spread to Treasurys is 379 basis points per the BAML benchmark index, right near a post-crisis low.
    • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, IHY, HYXU, ANGL, PGHY, HYLS, XOVR, THHY, UJB, QLTC, SHYG, HYZD, HYND
    | Mar. 10, 2014, 1:01 PM
SJNK Description
The SPDR® Barclays Capital Short Term High Yield Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Barclays Capital US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index (index ticker BHY5TRUU).
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Country: United States
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