High Yield Bond ETFs
These ETFs invest in high yield bonds, commonly referred to as junk bonds – bonds that are issued by companies with less-than-perfect credit ratings. Due to the nature of the bonds they invest in, the values of these ETF’s can be more volatile than the more secure alternative of corporate bond ETF’s. However, many investors look to high yield bonds because of the high returns that they pay. A high yield bond ETF, then, is a way for investors to reap some of the benefits of these bonds without taking on as much risk as they would with the purchase of a bond. These ETF’s tend to perform stronger when nervousness about the economy is at a low and people are actually buying the bonds.
