My corporate bond funds (DODIX Dodge and Cox Income, USAIX USAA Income, etc) are taking the expected nose dive, but some junk and preferred ETF's I've been keeping an eye on (USHY iShare High Yield, PEF iShares Preferred, etc) have gone down a lot less. What's up with this? Flight to better income yields? A delayed effect because the duration of the junk bond funds is shorter than the bond funds?
The junk bond funds have twice the yield of the corporate bond funds and their alphas are higher and betas are lower, although that's to some extent apples and oranges. I don't think there's as much risk for the junk bond market as there was the last few years, the losers have been flushed out, everyone's almost done with their dodgy restructuring deals, and the main sectors in that area, energy and real estate, seem to be on the rebound.
Any ideas? I'm intrigued and a little suspicious of these funds.