Investors are showing interest in high-yield bond funds, which have held up well in the current market, Rob Silverblatt of US News and World Report
writes. Silverblatt writes that funds focusing on junk bonds have been up 2.6 percent on average this year through Monday while funds focusing on long-term U.S. government debt fell 13.5 percent on average in the same time period.
Though rising rates are not ideal for junk bonds, they aren't fatal either. Silverblatt speaks to Sarah Bush
, a senior analyst for Morningstar
, who says junk bonds will prove heartier because one portion of its yield depends on the spread, not the yield. A limping stock market would hurt junk bonds more than rising interest rates, Silverblatt quotes Bush as saying.
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