SPDR Portfolio High Yield Bond ETF Price & Performance (SPHY)

High-yield bond funds continue to attract attention for their potential to deliver substantial returns. Funds like the SPDR Portfolio High Yield Bond ETF and the iShares iBoxx $ High Yield Corporate Bond ETF offer yields over 7%, but investors must weigh these gains against the elevated credit risks inherent in junk bonds.12

The divergence between stocks and bonds has returned, benefiting diversified portfolios. Bonds are once again acting as a counterbalance to equities, a key advantage for 60/40 stock-bond strategies. This negative correlation helps mitigate losses during stock market downturns, reinforcing bonds' role as a stabilizing asset.34

Dividend-focused ETFs, such as the Vanguard High Dividend Yield ETF, are outperforming during market corrections. These funds offer higher yields than the broader market and provide a cushion against volatility. Utilities ETFs, for instance, combine stable earnings with growth potential, making them attractive amid economic uncertainty.56