Three High Yield Corporate Bond ETFs For 2012

As confidence in a sustainable economic recovery continues to remain wary, unemployment remains high, the equity markets remain volatile and consumer demand grows at a snail’s pace, high yield corporate bonds, and the exchange traded funds that track them, could pose an opportunity for investors. 

One of the biggest reasons that these bond ETFs have appeal is the widening spread between the yields they offer as compared to those offered by US Treasuries.   Some of these high-yield instruments offer 12-month yields greater than 7% as compared to a mere 0.11% offered on a 12-month Treasury note.  Read more of this post

Claymore To Launch 9 New Junk Bond ETFs

In an attempt to further broaden its arsenal of exchange traded funds (ETFs), Claymore Securities recently announced its plans to introduce nine target date high yield corporate bond ETFs with maturity dates ranging from 2012 to 2020. 

These junk bond ETFs are expected to replicate indexes which consist of high yield debt securities, maintain a target termination date and will gradually be converted to cash, with an ultimate distribution being made to shareholders at the maturity date. 

Claymore’s decision to introduce these products couldn’t come at a better time as the appeal of high-yield corporate bonds has increased as investors are starting to accept additional risk to seek higher yields on fixed income.  With the Federal Reserve showing no signs of bumping up benchmark interest rates in the foreseeable future, yields on traditional low risk Treasury bonds are expected to remain relatively insignificant, further boosting future appeal of junk bonds which can boast double digit yields.  Read more of this post