Biggest High-Yield ETFs Surge Most in Decade After Fed’s Pledge
- HYG, JNK funds jump after Fed takes aim at junk bonds
- Announcement is a ‘significant relief,’ says Principal’s Shah
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A surprise pledge from the Federal Reserve to buy recently downgraded corporate bonds boosted some of the biggest ETFs tracking the securities.
The $14.8 billion iShares iBoxx High Yield Corporate Bond ETF, or HYG, surged about 7.5% -- the most since January 2009 -- after the Fed said Thursday that it will expand its corporate bond buying program to include debt from companies that recently lost their investment-grade rating. The announcement also gave a boost of the same magnitude to the $8.5 billion SPDR Bloomberg Barclays High Yield Bond ETF, or JNK.