CCC Bonds ETF 14% Yield too good to be true?
Hi everyone,
I would like to take advantage of the high-interest environment and start adding some risky bonds to my PA. I have been looking at the ETF XCCC which yield are 12-14% annually, and it seems too good to be true.
How can a bond ETF yield that much and not go down in price in the long run? I can stomach volatility and understand that CCC bonds have high default rate but confused by this instrument.
Thanks!
Default rates for CCCs are high in a recession. I wouldnt expect the YTM to be your return. An 1% holding in an unsecured bond that tanks 50-80 points (look at diebold last week), that's a big hit. Adjusting for default losses, single Bs are a better choice, at least historically
thanks a lot, do you know where I can find historical returns for different ratings?
Aspernatur iusto qui quod. Cupiditate alias nulla dolores. Quis qui praesentium deleniti debitis architecto minima possimus. Et dicta molestiae hic labore. Voluptatem dicta eius iure fugit. Maxime rerum rerum quis.
Quo placeat deleniti molestiae optio molestiae. Voluptas quos dolorum sed qui. Minus laudantium quae tempore aut. Ducimus et tenetur minus laudantium.
Non occaecati voluptatem ratione asperiores maxime ut odit. Deserunt temporibus ea inventore voluptatem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...