This is an excerpt from ETF Battles on ETFguide TV between LQD vs. JNK – two bond ETFs at opposite spectrums of credit risk. Who wins the battle?
In our latest ETF Battles, Ron DeLegge at ETFguide referees the match-up between the iShares iBoxx $ Investment Grade Bond ETF (LQD) and the SPDR Barclays Capital High Yield Bond ETF (JNK) with David Kreinces at ETF Portfolio Management and Mike Akins at ETF Action judging the battle.
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The most important single factor in shaping security markets is the public’s psychology. That was Gerald Loeb’s observation about how financial markets operate. And history has proven this assessment to be consistently true. What about now?
Although the broader bond market (NYSEARCA:AGG) is generally considered to be a more conservative place to invest versus stocks,
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After gaining five consecutive years and gaining nine out the past 10 years, the U.S. stock market is on a roll. And while it’s easy to become complacent, warning signs are already showing up in the bond market.
(Audio) Listen to Ron DeLegge @ The Index Investing Show
The chart below illustrates how risk appetite in the bond market is shifting away from high risk to safety by favoring top credit graded U.S.
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What does the bond market know that the stock market doesn’t?
Even the U.S. stocks (NYSEARCA:IWV) have been scoring one record high after another, the SPDR Barclays High Yield Bond ETF (NYSEARCA:JNK) has gone in the opposite direction.
The performance divergence between high yield bonds (also known as “junk bonds) (NYSEARCA:HYG) and the S&P 500 (SNP:^GSPC) began on May 22 and has grown.
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Each month, our Mega Investment Theme Report organizes the order of major events by their impact and importance. And swelling sovereign debt (NYSEARCA:BWX) continues to be a stubborn trend that has made every single report.
In Ernest Hemingway’s classic novel, “The Sun Also Rises”
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