Corporate Junk Bond

Junk corporate bond funds and ETFs - sometimes referred to as high-yield... Junk corporate bond funds and ETFs - sometimes referred to as high-yield corporate bonds and ETFs - are debt securities issued by companies. These are the riskiest corporate bonds that can be purchased, based on their classification by ratings agencies such as Moody’s and Standard and Poor’s (S&P). Typically, a corporate bond is considered junk or speculative if it is rated below Ba by Moody's, or below BB by S&P. Junk corporate bonds are only appropriate for investors with a high risk tolerance, and who are willing to risk part or all of their investment capital in exchange for higher potential interest payments. Depending on numerous issuer-specific and economic factors, such as overall risk appetite in financial markets, the spread between investment-grade and junk corporate bonds can widen or narrow. A wide spread indicates that investors are demanding a hefty premium to buy junk bonds, whereas a narrow premium suggests that the market is less concerned about the risk that they may default Last Updated: 05/09/2024 View more View less

Junk corporate bond funds and ETFs - sometimes referred to as high-yield corporate bonds and ETFs - are debt securities issued by companies. These are the riskiest corporate bonds that can be purchased,... Junk corporate bond funds and ETFs - sometimes referred to as high-yield corporate bonds and ETFs - are debt securities issued by companies. These are the riskiest corporate bonds that can be purchased, based on their classification by ratings agencies such as Moody’s and Standard and Poor’s (S&P). Typically, a corporate bond is considered junk or speculative if it is rated below Ba by Moody's, or below BB by S&P. Junk corporate bonds are only appropriate for investors with a high risk tolerance, and who are willing to risk part or all of their investment capital in exchange for higher potential interest payments. Depending on numerous issuer-specific and economic factors, such as overall risk appetite in financial markets, the spread between investment-grade and junk corporate bonds can widen or narrow. A wide spread indicates that investors are demanding a hefty premium to buy junk bonds, whereas a narrow premium suggests that the market is less concerned about the risk that they may default Last Updated: 05/09/2024 View more View less