iShares iBoxx $ High Yield Corporate Bond ETFNYSE American: HYG

Default risk is rising, and high-yield credit is underpriced; I recommend caution until after a credit event for better opportunities. The iShares iBoxx $ High Yield Corporate Bond ETF offers access to high-yield bonds but is sensitive to economic cycles. HYG's broad indexing and low fees are attractive, but its market-value weighting leans towards highly indebted companies, increasing risk.

Evaluating iShares iBoxx $ High Yield Corporate Bond ETF as an investment option at its current market price. I was previously bullish on HYG, which has shown solid gains, but now I have a more moderate stance. Coverage ratios and spreads across the high yield sector are on the decline, suggesting patience is probably the best outlook going forward.

These four ETFs have different yields and risk profiles. Exchange-traded funds provide a diverse portfolio.

High-yield bond funds like HYG offer stable and attractive income streams, appealing to retirees seeking passive income. That being said, some bad news is emerging for the high-yield space. We share our concerns with the sector and with HYG in particular, and we discuss what we like better.

iShares iBoxx $ High Yield Corporate Bond ETF is the largest “junk bond” ETF in the market and is often used as a benchmark. The yield is attractive, but both price and distributions have suffered a decay for years. If HYG doesn't look compelling as a long-term investment, it may be useful in tactical allocation strategies.

Statistically, one of the most bullish days of the year, July 1st was rather surprising. Our family of stock market ETFs was not so happy on Monday.

High-yield bonds, also known as "junk" bonds, performed well in a volatile April for financial assets, demonstrating unexpected strength despite a significant increase in benchmark borrowing rates.

You may want to think about investing in 3-5 year Treasuries or housing stocks as a way to protect against risk. High-yield spreads are currently at historically low levels, and junk bonds are facing similar refinancing risks as commercial real estate debt.

As we start a new month, quarter, and week, I want to remind you how I concluded the weekend Daily: “Narratives are not very meaningful if price says something different. We have seen narratives change on a dime as price rules.