JNK: Yield To Maturity Now 8.4% And Things Are Warming Up


  • We covered this one around a year ago and told people to run for the hills.
  • The interest rate environment has done an about turn since then and investors have been spanked for chasing yield.
  • We review the current numbers to gauge the impact and provide our verdict.
  • Looking for a helping hand in the market? Members of Conservative Income Portfolio get exclusive ideas and guidance to navigate any climate. Learn More »
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When we last covered SPDR Bloomberg Barclays High Yield Bond ETF (NYSEARCA:JNK) the risk free rate was yielding around 1.5%. JNK comprised almost entirely of junk bonds, and with a 30-day SEC yield of 3.79%, was trading at a slight premium

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This article was written by

Trapping Value profile picture
The best way to provide income in today's markets while reducing risks

Conservative Income Portfolio is designed for investors who want reliable income with the lowest volatility.

High Valuations have distorted the investing landscape and investors are poised for exceptionally low forward returns. Using cash secured puts and covered calls to harvest income off value income stocks is the best way forward. We "lock-in" high yields when volatility is high and capture multiple years of dividends in advance to reach the goal of producing 7-9% yields with the lowest volatility.

Preferred Stock Trader is Comanager of Conservative Income Portfolio and shares research and resources with author. He manages our fixed income side looking for opportunistic investments with 12% plus potential returns. 

Disclosure: I/we have a beneficial long position in the shares of ENB, PBA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Long position is in preferred shares of these companies.

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