"Despite its nickname referencing below-investment-grade corporate bonds, this State Street ETF has delivered consistent monthly income to investors for over 18 years. With a current yield around 6.5% and $7.7 billion in assets, JNK appeals to retirees seeking reliable income without picking individual bonds. How JNK Generates Its 6.5% Yield JNK produces income by tracking the Bloomberg High Yield Very Liquid Index, which holds hundreds of below-investment-grade corporate bonds. These bonds pay contractual interest that flows through to shareholders as monthly distributions."
"The creditworthiness of JNK's underlying borrowers has improved dramatically over the past year. Credit spreads measure the extra yield investors demand for taking on default risk, and these spreads have compressed to just 2.74% as of January 2026. This represents near two-decade lows, signaling that bond market participants see minimal default risk ahead despite economic uncertainties. The tight spread environment reflects strong corporate balance sheets and supports the sustainability of JNK's distributions."
JNK is a State Street ETF that tracks the Bloomberg High Yield Very Liquid Index and holds hundreds of below-investment-grade corporate bonds. The ETF has delivered consistent monthly distributions for over 18 years, offers a current yield around 6.5%, and manages about $7.7 billion in assets. Bond coupons are contractual and flow through as monthly income, providing retirees predictable payments. Credit spreads have compressed to about 2.74% as of January 2026, near two-decade lows, reflecting stronger corporate balance sheets and supporting distribution sustainability. Distributions rose as higher interest rates increased coupons, though tariff-related economic headwinds could pose risks.
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