Another Option for Strongish Balance Sheets

The latest earnings season has been generally strong for US stocks.  More than 83% of companies in the S&P 500 have exceeded the average analyst profit estimate for this quarter.  In light of this decreased probability of default, high yield bonds have performed well.  Another option for income in this environment is the high yield space.  My favorite junk bond ETF is SPDR Barclays High Yield (JNK).  The yield is currently over 12% and the expense ratio is 0.40%.  Costs don't get much lower in the high yield space.  Keep in mind that these bonds are called junk for a reason.  Average credit quality is B and average duration is currently 4.7 so if the Fed starts raising rates sooner than anticipated, this fund will be adversely impacted.