Riskiest of junk bonds on pace for three-year winning streak
- U.S. bonds rated CCC or lower are outperforming higher-rated debt with a 1% total return month-to-date, according to ICE bond index data; year-to-date return is 5.8%.
- Lowest-rated debt return compares with a 1.9% increase for U.S. junk bonds overall and a 1.9% decline in high-grade bonds, according to ICE index data.
- Higher returns from the lowest-rated bonds make them attractive to high-yield investors and supply is down.
- So far this year, junk bond issuance, at $150B, is lowest since 2009.
- Source: Bloomberg First Word.
- Previously: Junk bond spreads tighten, yields drop as investors wait for supply to resume (July 10)
- ETFs: HYG, JNK, DHY, HIX, EAD, PHT, HYT, HYLD, JQC, ACP, ANGL, CIK, MCI, DSU, SJB, KIO, NHS, CIF, ARDC, IVH, GGM, AIF, MPV, FHY,, JSD, VLT, HYLS, PCF, UJB, FALN, CJNK, HYIH, HYLB, HYXE, WFHY, HYDB, BSJP, HYUP, USHY