USA Today says despite low yields and higher risk investors can't get enough of junk bonds*.
Global investors poured a weekly record net $1.4 billion into high-yield bond funds the week ended Feb. 9, 2011. U.S. investors put $16 billion into the funds the past 12 months according to the report.
At the peak of the credit crunch in December 2008, junk bonds yielded 22.3%. According to Moodys, junk bond yields dropped to a record low of 6.84%. The risk premium, or difference between the yield in junk and ultra-safe investments has fallen to 4.25%. That's about 100 basis points lower than the 5.27% average yield difference since 1984.
The secondary market for structured settlement payment rights (colloquially known as "In force structured settlements") available to individuals affords yields close to , or in some cases exceeding the current junk bond rates**. Assuming the purchase of structured settlement payments rights has been properly consummated, there appears to be less risk.
"Executive Life was done in primarily by declining values and defaults in its junk bond portfolio"-New York Times April 13, 1991
* USA Today Money Section February 16, 2011
**rates vary by duration and other factors.