SPDR® Barclays High Yield Bond ETF
Latest SPDR® Barclays High Yield Bond ETF News and Updates

Why tight credit spreads usually mean a period of global expansion
Today, most measures of credit conditions are positive, with tight spreads across all of fixed income. Even high yield spreads have come in after a short scare last month.
Rate hike horizon: September’s jobs report was largely positive
After September’s strong jobs numbers, a Fed rate hike could be on the horizon early next year. Russ explains two equity market implications.

Muni Bond Investment Opportunities in the Current Environment
BUTCHER: Thank you. Do you see any specific opportunities today? COLBY: I think there are two fairly distinct opportunities for investors to consider. One is based on interest rates and interest rate outlooks. The other is based on risk that investors might be willing to assume on a credit basis. From an interest rate perspective, […]
Why issuers stayed away from high-yield debt markets
Issuance slowed to a trickle when market conditions were unfavorable in August. A number of transactions were either postponed, re-priced, or withdrawn from the market altogether. There was an increase in high-yield debt risk perceptions.

Why wage growth could cause rates to rise
Wage growth could cause rates to rise. A hike in wage rates could boost consumption and encourage individuals outside the labor force to join. This will increase disposable income.
Why smaller oil and gas firms are foraying into high yield debt
High yield debt markets saw $6 billion worth of new supply issued across 12 transactions in the week ending October 24.

Must-know leveraged loan update: Issuance increased last week
The primary loan market remained busy with opportunistic issuers coming in to test the investor’s interest for floating interest rate loans.

High Yield Offers Attractive Potential in a Yield-Starved World
In an environment of generally decent, albeit recently disappointing, growth and gently rising yields, high yield offers attractive potential in a yield-starved world.

MDC Partners Issued the Most Junk Bonds in the Week to March 18
MDC Partners (MDCA) offers marketing and communication network services. It issued dollar-denominated junk bonds worth $900 million on March 18.

Must-know: High yield fund flows regaining strength, time to dip back in?
After several weeks of record outflows, investors start regaining trust Fund flows gauge where most investors are moving their money. While following this indicator assumes momentum strategies work, in weeks of high inflows, there will be a delay between the time when funds come in and when managers can invest them in assets, so they […]

The Quest for Yield: Chasing Dividend Stocks
If you had to sum up investing in the US markets after the Great Recession in a few words, you would probably say something like “the quest for yield.”
Must-know: Future impacts of financial stability measures
The Fed currently uses considerable staff resources in monitoring financial markets for risks arising from financial instability.
Overview: High-yield debt market borrowers set new 2014 records
Despite a holiday-shortened week, issuance volumes for leveraged loans surged by almost 49%, week-over-week, to $21.3 billion.
Why investors piled into junk bond funds
High market volatility usually increases risk perceptions for junk bonds (PHB). This increases spreads and yields. As a result, bond prices decrease.

When geopolitical risk takes precedence over interest rate risk
The total returns on municipal debt came in at 3.32% in the first quarter of 2014, as measured by the Barclays Municipal Bond Index.
Why Kocherlakota says price targeting beats inflation targeting
Along with the two suggestions mentioned in Part 6 of this series, Narayana Kocherlakota also dropped in two additional suggestions for improving the FOMC framework statement.

Where Can You Find Relative Value within Fixed Income?
Where’s the relative value within fixed income? High yield bonds appear relatively attractive.
Why the FOMC believes that credit conditions are still strong
Easier borrowing conditions stimulate business investment among firms. Higher investment would generate employment and benefit firms’ revenues and profits.
Overview: High-yield bond markets since the Great Recession
High-yield, or junk-rated, bonds have higher yields than investment-grade bonds—like U.S. Treasuries and high-quality corporate debt. They’re issued by borrowers with higher credit risk—for example, with a lower ability to service the debt issued. Investors need a higher return to compensate for the higher risks involved.
Unemployment and discouraged workers: The improvement continues
This article considers the halfway mark improvement in the U-4 labor data and the implication for fixed income investors.
Why Fisher and Plosser disagreed with the FOMC policy motion
Richard Fisher believes that the Fed needs to tighten policy. This is based on the improved labor market and inflation outlook. He also believes that continued monetary accommodation is causing signs of “financial excess” in certain asset classes. He spoke earlier about signs of froth in high-yield bond (JNK) (HYG) markets.
Why are junk bond yields the lowest ever on record?
The BofA Merrill Lynch U.S. High Yield Master II Index increased by 0.34% over the week ending June 20, and is up by 5.64% so far this year (up to June 20).

Break prices confirming weakness in the bond high yield market
The price at which bonds are breaking for trading in the secondary market shows a clear downtrend year to date. The price at which bonds are placed with initial investors is given by the original issue discount (OID) and sets the bond’s yield to maturity. The break price, on the other hand, refers to the […]

Jeffrey Gundlach: The Junk Bond Market Needs Higher Oil Prices
Jeffrey Gundlach also warned about the high-yield market (HYG) (JNK). He said the “clock is running out” for energy companies (IEZ) due to low oil (USO) prices.

Why Did US Stock Indices Rise?
Treasury yields fell across the yield curve last week after the US Department of Labor reported that the economy added fewer jobs in April.
Why investors are turning to corporate bond ETFs
Investors seeking exposure to investment grade or high yield corporate debt have increasingly been using fixed income ETFs.

Where Are Oil Prices Heading?
Oil prices are expected to be lower for longer. This is bad news for high yield bond funds (HYG) (JNK) in the United States.

High yield issuance continues to increase, spike likely unsustainable
The large high yield bond issuance was the second largest over the past two months and the highest in number of issuances Weekly issuance can help gauge both the demand and supply of the high yield bond market. New bonds increase the supply available to investors in the secondary market and the demand given indicates […]
Bear strategy: Profit from rising rates with fixed income ETFs
Investors could consider hedging their short-term duration risk (HYG: 3.98 years, JNK: 4.20 years) with a short position in longer-dated bonds.

Why Excessively Low Rates Could Be Harmful
Excessively low rates have side effects. Treasury yields have been beaten down due to the Fed’s excessive buying. Currently, the ten-year Treasury (IEF) yields are 2.1%.
Hedging: You can profit from rising rates with fixed income ETFs
Should interest rates rise equally in the five-year part of the yield curve as the 20-year part of the yield curve, HYG and JNK would likely decline roughly 3.98% and 4.20% in value.
Why did investors give US debt markets the thumbs down?
Volatility, or the index commonly known as the “fear factor,” surged over 34% to 17.03 in the week ending August 1—this was the highest level in almost four months.
Must-read: Use emerging market bonds for higher yield potential
For those who want a little more adventure on their menu, there’s always the option of adding some unique flavors like spicy kebabs. This is the equivalent of adding some emerging markets fixed income to your bond portfolio.

High-Yield Bond Funds Witnessed Large Outflows
Investor flows into high-yield bond funds were negative last week. According to Lipper, net outflows from high-yield bond funds totaled $1.8 billion.

When The Net Asset Value Of A Bond ETF Differs From Market Price
The Intraday Indicative Value gives us a more real-time value than the bond ETF’s NAV. It’s considered an implied value of an ETF.
Cyclical and structural unemployment in a recovering economy
A major disagreement among Fed economists is how to classify unemployment in the economy. Unemployment can be caused by cyclical or structural factors. A number of Fed officials, including Janet Yellen, believe that there’s evidence of significant “labor market slack.” This is caused by cyclical factors.
AAA and AA credit versus the below-investment-grade Sprint
This article considers the trade-offs between high-quality, low-yielding fixed income opportunities and lower-quality higher yields in the current improving economic environment.

How Can You Add Carry to Your Portfolio?
Adding carry to your portfolio in a low-return scenario could cushion your portfolio.
Labor conditions: AAA credit versus the sub-investment-grade Sprint
This article takes a closer look at the changes in the discouraged worker data and considers the implications for fixed income investors.
Must know: Why junk bond funds are in vogue again
Secondary market activity in high yield debt mutual funds High yield debt (HYG) mutual funds recorded their second consecutive weekly inflow. Net flows into junk bond (JNK) funds came in at ~$1.6 billion in the week ending October 31. Net flows into high yield bond (PHB) mutual funds are down by ~$2.3 billion so far […]
Why is leverage a double-edged sword for companies like Apple?
Corporate bond issuance in the U.S. reached $1.4 trillion in 2013, according to the Securities Industry and Financial Markets Association (SIFMA), a new record.
Why high yield bonds offer an investment opportunity
High yield bonds have come under pressure lately, and as a result, are now looking relatively attractive. Spreads recently widened out to the highest level in a year.
Why did new high yield bond issuance spike last week?
High yield issuance last week rebounded sharply from the past two weeks’ lows. Issuers took advantage of strong market conditions for debt offered at relatively low borrowing costs.
Why the Fed’s Dudley and Evans advise patience in lifting rates
After the 2008 financial crisis and Great Recession, U.S. monetary policy has been designed to boost economic growth and create jobs. The Fed has kept the federal funds rate at near-zero levels since December 2008.

Areas of Relative Value within Fixed Income
For investors, the implications are not to load up on bonds, but to tactically look for areas of relative value within fixed income.

Current High Volatility Regime Will Likely Persist
The high volatility regime will likely be the norm in the future. State Street observed that the US market has already clocked 42 highly volatile days in 2015.

Why is the high yield bond market seeing so much fresh supply?
Strong weeks of issuance signify an overall bullish market. High yield issuance for last week was at its strongest so far in 2014.
Why asset classes reacted differently to September’s FOMC
High-yield bond markets may have oversold ahead of the September FOMC statement. Recent trends in investor outflows from high-yield mutual funds suggest that investors are cautious.

US Stock Indexes Rally with Japan’s Stimulus and Robust Jobs Data
The three US stock indexes that we review in this weekly series rose from July 5–12, 2016. Robust US jobs data boosted investor sentiment and eased the fear of an economic slowdown.

Who will replace Bernanke as the next Fed Chairman? (Part 3)
Continued from Part 2 Because Bernanke will step down, there’s great speculation on who will replace him So who is it likely to be the next Bernanke? The case for Summers Between the two, Summers certainly has more excitement building around him than Yellen. Summers also has Wall Street credibility—at least more so than Yellen. […]

Bonds Could Underperform In 2015
Interest rates and bond yields are already at very low levels. Inflation could pick up and lead to a rate hike. So, bonds could underperform going forward.

Prime Security Services Issued the Most Junk Bonds Last Week
Prime Security Services is a subsidiary of Apollo Global Management (APO). It issued junk bonds worth $3.14 billion on April 20.

Investors Look to Fallen Angel High Yield Bonds for Value
The start of 2016 has been marked by an increase in the quantum of fallen angel bonds in the high-yield bond market (HYG) (JNK).

Building with Buffer: The Case for Bonds
Bonds and stocks are negatively correlated. This is why bonds can act as a ballast in your portfolio, and thus the case for bonds is still strong while building with buffer.

How High Yield Emerging Market Bonds Can Offer Hidden Value
HY EM bonds currently offer higher yields than both high yield US corporate bonds (HYG) (JNK) and high EM sovereign bonds.
Recommendation: Look to select areas of emerging market debt
Select areas of the EM debt sector hold good potential, as many of these countries exhibit low leverage levels and are currently funded through year-end.

Plunging Oil Causes Turmoil In High Yield Bond Markets
The turmoil in high yield bond markets has left more than 18% of junk bond issuers at distressed levels. Investors should avoid the scary junk bond segment.

Why Higher Correlations Between Risky Assets Don’t Bode Well
Increasing correlations between risky assets could leave your portfolio vulnerable.
Why the issuance for high-yield bonds was dropped
After rising sharply the previous week, the issuance for the high-yield bonds dropped to $8.6 billion for the week ending on May 16 compared to $10 billion for the week ending on May 9.

US Stock Indexes Almost Flat after Release of FOMC Minutes
The three US equity stock indexes we review in this weekly series were mostly flat from August 11–18, 2016. This came after the minutes from the July 26–27 FOMC meeting.

Risk-adjusted returns on high yield bond ETFs at par with the market
Know how XLY outperformed rest of the ETFs on risk-adjusted basis, closely followed by DEF.
Improving consumer confidence suggests better capital spending
Consumer confidence, while low, is improving. During the first half of 2014, the Conference Board’s measure of consumer expectations averaged a little below 82, a material improvement from the previous four years.

High-Yield Bond Issuance Rose Last Week
The total US dollar-denominated issuance of high-yield debt stands at $56.9 billion YTD in 2016—29% lower compared to the same period in 2015.

The difference between High Yield Bond ETFs and Investment Grade Bond ETFs
The corporate bond market is divided into two broad categories: the high grade market and the high yield market.

The Difference between Corporate Bonds and Treasuries
Bond investors should understand the difference between Corporate Bonds and Treasuries. Below is a list of the key differences between the two.

High-Yield Bonds Are Turning Out to Be the Real Winners
High-yield bonds gained popularity due to higher yields compared to Treasury bonds, whose yields were being pushed down by the Fed’s interest rate policy.

Divided Opinions about the Fed’s Rate Hike Procrastination
The December 2015 rate hike was the first since the 2008 global meltdown. Now the Fed is hinting at the first rate hike of the year to come in December 2016.

Connection Between Equities And High Yield Bonds
Equities and high yield bonds perform well when the economy is improving, and both underperform when the economy is slumping.
Credit risk: Why high-yield bonds act like equities
High-yield debt could do well, but there are risks. The Fed shifting toward more contractionary monetary policy poses two risks to high-yield debt.

High yield bonds, the pain continues and will only get worse
The fund flows for last week once again plummeted as investors remove cash from bonds ahead of the FOMC meeting. Fund flows are key in determining the sentiment of investors towards a given asset class. Weekly fund flows measure how much cash investors put into and remove from mutual funds focused on investing in high […]

High yield fund flows stumble, demand side may be getting weak
High yield bond flows for last week posted the first outflow in five weeks, possibly signaling weak investor confidence Fund flows are the best indicator of investor demand in the high yield bond market. Naturally, an increase in investor demand is reflected in increased bond prices and lower yields. When demand falters, issuance is diminished […]
High yield debt issuance resurges in the primary market
New issue volumes for high yield debt rose 13.3% week-over-week to $6.8 billion across nine issues in the week ending October 31. Issuance had come in at $6 billion across 12 deals in the week ended October 24.
An investor’s guide to the US leveraged financial market
According to the Securities Industry and Financial Market Association, SIFMA, the total U.S. fixed income market size is about $38.6 trillion.

Comparing leveraged loans and high yield bonds: Credit rating
Credit rating measures the credit-worthiness of a debtor with respect to its financial and operational stability. Rating agencies such as Moody’s and Standard & Poor’s specialize in rating credit to government agencies and corporates.
Comparing leveraged loans and high yield bonds: Key distinctions
Leveraged loans (BKLN) are almost always secured or backed by a specific pledged asset or some form collateral. On the other hand, high yield bonds (JNK) may be secured or unsecured.
Comparing leveraged loans and high yield bonds: Debt terms
Another item that differentiates leveraged loans from high yield bonds is “covenants,” or the financial health metrics that issuers must adhere to.

Know how to calculate and interpret your bond’s duration
Duration, in effect, takes into account various factors while providing with an assessment as to the price sensitivity of the bond to interest rate changes.

The default rate and its relation to bond and loan prices
Default rate is a key metric of credit risk and is defined as the risk that the counterparty will default on its financial obligations.
Using sector rotation during rising interest rates
So how can an investor use sector rotation during a rising rate period? By rotating some assets out of fixed income sectors that tend to underperform in this kind of environment and into sectors that tend to benefit. Typically during rising rate environments, the Fed is raising the federal funds rate in response to high […]

Must know: How credit rating affects default rate and bond price
A lower credit rating means higher risk, and therefore, higher yield as investors look for the premium to take the risk and vice versa.
Key differences between high yield and investment-grade bonds
Investment-grade corporate bonds (LQD) carry inferior yields compared to high yield bonds (JNK) with the same maturity date.
Credit ratings in expansions affect companies like Thermo Fisher
According to the National Bureau of Economic Research (or NBER), the trough of the recession was reached in June 2009, and the economy began expanding in Q3 2009.
Investors are interested in the long end of the Treasury curve
In contrast to the three-week auction—where lower demand resulted in high yield—the U.S. ten-year Treasury note (TLT) auctioned on Wednesday, March 12, attracted the highest demand in a year.
Why primary risk factors are important for fixed income investing
A portfolio’s exposure to yield curve twists—non-parallel movements in the yields curve—can also be approximated by using the present value distribution of cash flows.
How high-yield bond markets react to higher market volatility
High-yield debt mutual funds recorded a net outflow of ~$0.5 billion in the week ending October 17, reversing the previous week’s trend with net inflows of $1.3 billion.
Mester weighs in on using “sticky” prices in inflation models
According to Mester, core price inflation in the services sector has ranged between 2.25% and 2.50% since 2012. A deceleration in core goods prices has resulted in headline inflation falling below the Fed’s long-term inflation goals.
Why revisions in inflation measures impact ETF investors
In this part of the series, we’ll discuss Mester’s views on the second research question posed to the audience: how should monetary policy makers incorporate revisions to PCE inflation into their policymaking framework?
Why gold is a good diversifier for your portfolio
But gold also does two other things, which make it worth having in the portfolio in small amounts. It’s diversifying as it behaves differently than paper assets
Corporate debt trends—have high yield investors had enough?
However, corporate borrowers in the primary markets continued to take advantage of the low yields environment.
Analyzing secondary trends in high yield debt securities
Investor flows into high yield (HYG) mutual funds reversed their trend in the week ended June 27. High yield (JNK) mutual funds recorded net inflows of $619 million in the week
Why the Fed’s closely watching the BLS and ADP payroll reports
Few economic releases generate as much reaction from both stock (SPY)(IVV) and bond (BND) markets as the employment reports issued by Automatic Data Processing (or ADP) and the Bureau of Labor Statistics (or BLS).
Why bond investors are focusing on credit ratings and quality
Due to the seasonal slowdown in July and August, investment-grade bond (LQD) issuance dropped by 33% to $16.7 billion last week. Leveraged loan issuance also increased. It spiked 141% week-over-week to $21.2 billion.
Comparative market performance of high-yield debt ETFs
Bond yields and prices move in opposite directions. Due to the decrease in yields, returns on high-yield debt were positive in the week ending August 15. As mentioned in the previous part, junk bond yields decreased by 0.29% over the week ending August 15 to 5.63%.
Why the 5-year TIPS auction saw lower investor demand
The U.S. Treasury auctioned five-year TIPS worth $16 billion on August 21—lower than the $18 billion auctioned in April. Despite lower issuance, demand for the securities was lower at 2.48x—compared to 2.70x for the April auction.
Emerging and advanced market divide impacts sovereign risk
A financial or economic crisis in a foreign country could affect other countries included in the asset class or in the geographic area. Bond spreads could widen for other affected countries, despite the fact that their economic fundamentals were actually improving. This is especially true for emerging market debt.
Why are hedge funds holding out on Argentina?
Argentina’s default led to significant shock waves in international financial markets, including the S&P 500 Index (SPY), the NASDAQ-100 (QQQ), and the Dow Jones Industrial Average (DIA). It also led to a 0.52% spike in junk bond (JNK) yields in one week.
Corporate debt reacts to FOMC minutes and Europe’s banking stress
The release of the Fed’s Federal Open Market Committee (or FOMC) minutes for the June meeting, exerted a considerable influence over debt markets (AGG) last week.
Must-know: Investing in the PIIGS nations
The PIIGS nations are Eurozone’s most troubled economies. Considering historical and recent economic developments in these nations, most of them have been in serious financial trouble in regards to sovereign debt. The trouble with the PIIGS nations and the Eurozone economies lies in their monetary union.
Why high-yield debt funds see record outflows and bonds rally
While investment-grade bonds funds benefited from rising market jitters, high-yield bond funds bore the brunt. Last week, investors pulled a record $7.1 billion from high-yield bond funds—the largest weekly outflow ever.
Must-know: High yield bonds are risky and costly
One of the reasons why fixed income investing has been greatly favored by investors is because bonds help diversify the risk that comes from a pure equity portfolio.