High Yield Spotlight

Amid the market turmoil that pulled the S&P 500 lower by 8% and tech stocks down by 16% at one point, the one sector that continues to hover near all-time highs is junk bonds. Even though junk bonds are considered more of a speculative asset class, they don’t seem to be responding in the way you might expect during a consequential risk-off shift. This is why I want to take a look at the AllianceBernstein Global High Income Fund (AWF).

As the equity markets crumble (or at least the mega-cap tech segment of it does), the bond market has remained relatively steady. Credit spreads remain tight and there’s been no big flight to safety trade yet. That doesn’t mean that investors shouldn’t be thinking about it right now. The PIMCO Corporate & Income Strategy Fund (PCN) maintains a fairly balanced mix of credit qualities, making it perhaps better positioned to take advantage of a bond rally.

The rotation from mega-cap tech into small-caps showed investors why risk management is still important. With many people overweighting their portfolios in the magnificent 7 stocks, some were ill-positioned and left behind when conditions finally turned. The Global X Nasdaq 100 Risk Managed Income ETF (QRMI) is an intriguing option.