Corporate Bond ETF

Corporate bonds are debt obligations issued by .. you guessed it: corporations!  Bonds are issued as another way to raise capital to expand business in exchange for a biannual interest payment.  Corporate bonds typically pay out considerably higher rates than treasury bonds due to increased risk and several will fall into the high yield bond ETF group.

Corporate Bond ETF’s provide an easy way for the average investor to diversify across corporate bonds.  Always know what you’re investing in though.  The following list is a place to get started (yields as of June 2010):

SPDR High Yield Bond ETF (JNK) 11%
iShares High Yield Corporate Bond ETF (HYG) 9%
PowerShares High Yield Corporate Bond ETF (PHB) 8.5%
iShares Investment Grade Corporate Bond ETF (LQD) 5%
iShares Barclays Intermediate Credit Bond Fund (CIU) 4.5%
iShares Barclays 1-3 Year Credit Bond Fund (CSJ) 3%