NEW YORK ( TheStreet) -- High-yield bond ETFs have enjoyed surging popularity. During the past year, investors poured $5.6 billion into the two biggest high-yield ETFs, iShares iBoxx $ High Yield Corporate Bond (HYG) and SPDR Barclays High Yield Bond (JNK), according to IndexUniverse.com. Rich yields and strong returns have attracted the crowds. The two ETFs yield around 6.6%, and both returned more than 12% in the past year, according to Morningstar.Can high-yield funds continue rolling? Maybe. But the risks are growing as the share prices rise. High-yield bonds are rated below-investment grade, so they pose default risks. A crisis in Washington could send the low-quality bonds into a tailspin. To limit risk, consider a broadly diversified income ETF. Besides owning high-yield bonds, the diversified choices also hold high-quality assets. If junk bonds sink, the high-quality issues should help to stabilize the portfolios.
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