Junk Bond Investors Pile Into the Riskiest Debt: Credit Weekly

US junk debt investors are piling into the riskiest bonds even as Jamie Dimon and other prominent market watchers are cautioning that valuations on credit are stretched.

Bonds rated in the CCC range have gained 0.75% this month through Thursday, outpacing all other ratings tiers, including investment-grade debt. The highest-rated junk bonds, those in the BB tier, have turned in the worst performance among speculative-grade debt, implying that investors are trading out of the less risky junk bonds and into the securities paying the most yield.

It’s a shift from March and April, when investors’ fears about US President ...