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June 8, 2015

Junk bond funds: Love them or leave them?

  • Even with all the jitters, junk bonds have produced better returns this year than most other parts of the bond market.
  • By STAN CHOE
    AP Business Writer

    NEW YORK — Don't know what to make of the junk-bond market? Join the club.

    One month, dollars are flooding into junk-bond mutual funds and exchange-traded funds. The next, dollars are pouring out the opposite direction. Consternation is nothing new for this part of the market: Junk bonds are essentially loans made to companies with poor credit ratings, and they have to offer relatively big yields to attract investors. But skittishness has been particularly high, with $9.3 billion fleeing junk-bond funds in December only for $9.6 billion to go right back in two months later.


     
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