Author Topic: Junk companies etf?  (Read 1029 times)

scorpioncapital

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Junk companies etf?
« on: April 12, 2020, 07:01:05 AM »
Is there an index or etf of over leveraged bad businesses one can buy (or perhaps short). Or even a junk bond fund ?


given2invest

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Re: Junk companies etf?
« Reply #1 on: April 12, 2020, 07:03:19 AM »
Is there an index or etf of over leveraged bad businesses one can buy (or perhaps short). Or even a junk bond fund ?

HYG is the junk bond fund ETF.  I would not short that as on Friday the Fed literally said they were going to start buying it.  Crazy times we live in.

Cigarbutt

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Re: Junk companies etf?
« Reply #2 on: April 12, 2020, 07:08:56 AM »
Yes HYG is interesting.
I had built a position in WYDE (the mirror image of HYG) but WYDE was liquidated last August because of insufficient investor interest. :(
The last time I checked, high yield oil and gas made 11% of HYG.
But then again, it looks like banks are getting ready to take over the oil and gas industry and the Fed set up an SPV (this is not a joke) funded by the Treasury (this is not a joke) that will buy everything that looks distressed.
How do you deal with that?
It is the best of times, it is the worst of times.

scorpioncapital

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Re: Junk companies etf?
« Reply #3 on: April 12, 2020, 10:11:21 AM »
So this HYG is supposed to go down over time to zero? Or is it structured to go up when companies stocks do badly?

It actually says "Shares iBoxx $ High Yid Corp Bond"

so I guess this is junk bonds etf. I was thinking the same thing but for the equity portion.

I'm actually looking for something that will do badly, as a hedge. But maybe this is the wrong way to do it.
« Last Edit: April 12, 2020, 10:15:49 AM by scorpioncapital »

Kaegi2011

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Re: Junk companies etf?
« Reply #4 on: April 12, 2020, 06:51:50 PM »
I think it's worth warranting that the Fed is willing to buy sub-IG bonds only if the issuer was still IG as of 3/24/2020.  E.g., Ford falls into that camp, but not a lot of other large names do (e.g., KHC). 

scorpioncapital

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Re: Junk companies etf?
« Reply #5 on: May 05, 2020, 08:41:13 AM »
Does anyone know an inverse etf of poor quality stocks, or at least ones with very high capex requirements and very commodified stocks?

rb

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Re: Junk companies etf?
« Reply #6 on: May 05, 2020, 08:45:22 AM »
XOP