HYS: PIMCO 0-5 Year High Yield Corporate Bond Index ETF Market Currents Page 2

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Friday, February 22, 10:09 AM The soon-to-hit Market Vectors High-Yield/Treasury ETF (THHY) - by going long high-yield and short 5-year Treasurys - aims to protect against rising rates. Rising Treasury rates, that is. What happens if the economy worsens, Treasury yields fall, and high-yield rates rise? In golf it's known as the dreaded double-cross. 2 Comments [Financials]
Tuesday, February 19, 8:52 AM Calling investors "handcuffed volunteers," Howard Marks says the people buying high-yield (HYG, JNK) at 6% are doing so only because T-bills pay 0.25%. These investors weren't buying 10 years ago at 12% or 4 years ago at 20%. "Are they doing it because they are pie-eyed optimists? No, (but) because they have to have income to eat." 3 Comments [Financials]
Friday, February 15, 8:06 AM It's fashionable to bash the high-yield sector (HYG, JNK), but UBS has a kind word to say. On a relative basis, valuation is still attractive, with yields 500 basis points higher than Treasurys leaving plenty of room to tighten. Issuer quality isn't as bad as reported, they say, with just 20% of new paper at CCC or less, vs. 35% in 2007. 2 Comments [Financials]
Monday, February 4, 11:56 AM Last week's losses in high-yield were accompanied by sizable outflows from high-yield ETFs, with HYG losing $461M in assets and JNK $348M. Investors also pulled money from another hot sector, emerging markets bonds (EMB). All three are now posting losses YTD. 5 Comments [Financials]
Thursday, January 31, 4:37 PM Are funds flowing out of junk bonds? The noticeable turn lower in HYG and JNK in the past couple of sessions has been accompanied by surging volume, notes John Spence. Both of the ETFs have returned to about flat YTD. The IG corporate bond ETF (LQD) is now red. Dan Fuss describes today's high yield values as "ridiculous." Comment! [U.S. Economy]
Monday, January 28, 1:34 PM Things are as good as they can get in high-yield, with a default rate in 2012 of 1.9%, according to Fitch, above 1.5% in 2011, but well below the long-term average of 4.6%. Fitch expects the default rate to rise to 2% this year. "The constructive outlook ... is heavily dependent on steady, if not stellar macro conditions." No worries there! 1 Comment [U.S. Economy]
Friday, January 25, 3:16 PM At the same time high-yield paper has gotten to about its priciest levels ever, the maturity has also gotten longer. Notes expiring in 7 years now make up 39.4% of the U.S. High Yield Master Index. In 2009, notes expiring in 2016 accounted for just 15.3% of the index. 2 Comments [Financials]
Monday, January 14, 3:34 PM Junk bonds keep on trucking early in 2013, with yields at all-time lows so far not preventing further gains. They snoozed today through the President's warning of "haywire" markets and spiking rates should the debt ceiling not be raised. S&P Capital IQ remains bullish, noting durations on HYG, JNK, and especially SJNK are less than 5 years. Comment! [U.S. Economy]
Saturday, January 5, 8:25 AM Junk bonds plunged below the 6% yield barrier this week for the first time ever - a year ago, they averaged 8.7% - also making them less enticing than ever. But high-yield guru Martin Fridson says a high index dollar price doesn’t automatically portend losses; he focuses on the high-yield market’s average risk premium vs. comparable Treasury bonds, which he says "represents a substantial overvaluation." 2 Comments [Quick Ideas]
Monday, December 24, 2012, 12:24 PM Short interest in the iShares high yield ETF (HYG) hits a record high amid ideas the long junk-bond rally is coming to a close. After an impressive multi-year run, BAML's high-yield index yields just 6% and trades at a hefty premium to par. Return YTD: 15.6%. 1 Comment [U.S. Economy, Financials]
Thursday, December 20, 2012, 12:16 PM Smooth sailing is predicted in 2013 for the high-yield market by Fitch, which sees a 2% default rate, the same as this year. One issue will be the recent "aggressive" issuance - including a high rate of CCC or lower-rated paper, the reemergence of paid-in-kind debt, and covenant-lite loans. Seen in this context, the current low default rate should be viewed as a lagging, rather than leading indicator. Comment! [U.S. Economy, Financials]
Tuesday, December 11, 2012, 12:17 PM A bit more sign of froth in the high-yield market, covenant quality on junk bonds hit a record-low 4.15 (on a scale from 1 best to 5 worst) in November, says Moody's. Most curious were weaker-rated bonds having worse covenant quality than higher-rated ones - completely at odds with precedence and logic. 1 Comment [U.S. Economy, Financials]
Friday, December 7, 2012, 12:57 PM More from Hudachek's Overlooked ETFs: Investment-grade and high-yield debt investors may have interest in Guggenheim's Suite of products offering a range of maturities - from very short-term all the way out to 2020. The shortest term IG fund is BSCC, junk is BSJC. To go longer maturity, just swap the last "C'' in the fund symbol for "D," and so on, all the way out to "K." Comment! [Quick Ideas]
Thursday, December 6, 2012, 10:01 AM Loomis Sayles' Matt Egan issues a bit of a warning on high-yield, noting their only upside at this point is the coupon (not something to sneeze at). If prices rise any further, expect issuers to refinance into lower rates. The downside is defaults, and with the default rate as low as it currently is, they can only go in one direction. 5 Comments [Financials, U.S. Economy]
Tuesday, December 4, 2012, 9:41 AM An alternative to what may be a fully-milked high yield sector is leveraged loans, says David Schawel. These loans are floating rate, and he expects retail interest in them to pick up should concern about rising interest rates take hold. Invesco's Credit Opportunity Fund (VTA) - trading below NAV - is up 26% YTD while yielding north of 7%. Comment! [Financials, Quick Ideas]
Monday, December 3, 2012, 3:37 PM Closed to new investors since May, Vanguard's High-Yield Corporate Fund could reopen soon, according to Daniel Wiener. It's good news for junk investors as the fund's expense ratio is just 0.23% vs. 0.5% for HYG and 0.4% for JNK. Comment! [Financials]

HYS PIMCO 0-5 Year High Yield Corporate Bond Index ETF

HYS

PIMCO 0-5 Year High Yield Corporate Bond Index ETF