Junk-Bond Risks Cloaked by the Narrowest Trading-Range Ever

Here’s more ammo for the skeptics in the face of the relentless credit rally: U.S. high-yield bonds are trading in the tightest range in 20 years, underscoring the notion that the grab for yield has lulled investors to sleep.

So far this year, the difference between the highest and the lowest spread notched at the index level is 71 basis points. The range, one measure of volatility, is narrower than in 1997 and 2006, years that marked the peak of the global credit cycle, according to analysis from CreditSights Inc., citing Bank of America Merrill Lynch data.