the social scientist.

What the High-Yield Corporate Bond Market Is Telling Us

Brett:

I too have been monitoring the high yield bond funds, especially HYG. Do you know if the bonds in such funds are insured? That is, were CDS bought on them when put in the fund? Also, is a CDS good for the entire term of the bond, or do they expire after a certain period of time like puts. I read a lot, but I've never seen these questions posed or answered. If they are insured then an 18% yield is very attractive, even in the face of a possible 20%+ default rate.