2024-03-20 16:51:48 ET
Summary
- The iShares iBoxx $ High Yield Corporate Bond ETF has delivered strong returns in 2023 despite concerns about rising corporate defaults.
- HYG's strong performance was driven by tightening credit spreads, which are trading near all-time lows.
- However, all-time low credit spreads do not reflect reality, as actual defaults continue to increase. This signals potential risks for the HYG ETF.
Back in the fall of 2022, I wrote a cautious article on the iShares iBoxx $ High Yield Corporate Bond ETF ( HYG ), warning that slowing economic growth will likely lead to rising corporate defaults and more pain for credit investors....
Read the full article on Seeking Alpha
For further details see:
HYG: Mind The Gap Between Defaults And Credit Spreads