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High yield bond funds take a break

High yield is a nice way of saying "junk" when talking about bonds. These bonds are issued by firms who must pay a higher interest rate when raising capital than those companies that issue bonds that qualify as investment grade. Those higher interest rates are attractive to investors and lately demand for high yield bonds has led to a very nice rally in junk bond funds like the iShares High Yield Corporate Bond Fund (HYG).

Today, HYG is finally pausing in its uptrend as investors take some profits off the table across the bond market. Investors are concerned about the fact that the Treasury plans to flood the $112 billion worth of new debt into the market next week. That will be a record auction amount and could put temporary downward pressure on bond prices.

Continue reading High yield bond funds take a break

TIPs, munis & corporates: ETFs for income

This post is part of a 12-article feature that can be read here: Today's best income ideas.

"The markets are littered with compelling buying opportunities that may be the best we see in a generation," says Keith Fitz-Gerald.

In The Money Map Report, he looks at a trio of income ETFs -- one focused on Treasury inflation protected securities, one invested in muni bonds, and one that buys high yield corporates.

"We are holding three positions in our portfolio which we believe can be bought with new money. First, we suggest iShares Lehman TIPS Bond ETF (NYSE: TIP). The 10 year TIPS' yield is 2.23% versus 2.40% for 10 year Treasuries.

Continue reading TIPs, munis & corporates: ETFs for income

Best income buys: Wealth building and pre-retirement

This post is part of a 12-article feature that can be read here: Today's best income ideas.

"Assuming you want to invest a little more in the markets now, which ETF should be your first choice?" asks ETF expert Mark Salzinger.

In The Investors's ETF Report, he reveals his favorite picks from from two of his model portfolios -- a favorite for long-term wealth building and one investors still in their pre-retirement years.

Continue reading Best income buys: Wealth building and pre-retirement

Disconnect between stocks and bonds?

Arguably, many of the factors that influence the relationship between high yield -- often referred to as "junk" -- bonds and investment grade bonds, including economic fundamentals and investor attitudes towards risk, also affect share prices.

The more exuberant investors are, for example, the more likely they are to favor lending money to risky borrowers or shifting funds from money market accounts or fixed-income securities into equities -- and vice versa.

Continue reading Disconnect between stocks and bonds?

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Last updated: February 13, 2012: 05:43 PM

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