SJNK - SJNK: Short Duration Junk Just In Case The Fed Isn't Done

2024-03-06 13:43:10 ET

Summary

• Consider junk bond funds with shorter duration and lower volatility, such as the SPDR® Bloomberg Short Term High Yield Bond ETF.
• The SJNK ETF predominantly invests in short-term, high yield corporate bonds, offering higher yields but higher risk.
• SJNK has outperformed the SPDR® Bloomberg High Yield Bond ETF in this rate hike cycle, making it a potentially safer choice for short-term interest rate movements.

I continue to be worried about junk debt given just how tight credit spreads are and the growing possibility that the Fed may NOT cut rates this year. If you agree, you may want to consider junk bond funds that have shorter duration and as such lower volatility overall. This is where the SPDR® Bloomberg Short Term High Yield Bond ETF ( SJNK ) comes into play....

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