I have been reading headlines on StockTwits about SPDR Barclays High Yield Bond ETF's Investors (JNK) lately and found a lot of instances of fear-mongering with twits like: "$JNK Rate hike posting potential danger like '08?" People need to chill and go do somethings else rather than staring at their monitors all day long. I know the ETF is down over 11% year-over-year which is a lot for a debt fund. Obviously, investors are selling the shares because of the fear of the upcoming rate-hike. However, this is unjustified for a few reasons: - Companies, in which the fund invests, are not going belly-up anytime soon. Even if the cost of financing increases for them, the effect will not settle in for at least a year because the fund does not invest in short-term securities, according to its mandate. In fact, as they refinance at a higher rate, the fund's shareholders should actually get higher distributions because of higher coupon payments. - High yield bonds are not very sensitive to changes in the market rates for two reasons: (1) the have high yields, which shorten duration and (2) they are dependent on the underlying companies' credit rating. For these reason, the increase in rates alone will not affect the value of constituent bonds as much as the market thinks, given the ETF's price dynamics. Besides that, the fund invests in debt with mid-term maturities. This also affect duration in a positive for investors way. - I actually took the time to look at the fund's Top-10 holdings and found no company that should be badly affected by the rate hike: (Source: Fact Sheet) As the above illustration shows, none of the top holdings have maturities in the next two years. Moreover, the fund is heavily invested in telecoms and healthcare. I do not see these industries critically affected by rising interest rates. Hence, what is this noise all about? What kind of risks have I not accounted for? Please explain yourselves, panic-mongers!