ETF Database » HYG

4 Reasons To Still Hold High Yield

Russ Koesterich — Sat, 18 May 2013 01:00:27 +0000

By Russ Koesterich, CFA iShares Global Chief Investment Strategist As a number of market watchers have pointed out recently, high yield doesn’t look so junky anymore. High yield spreads are historically tight, at levels not seen since the fall of 2007 as the chart below shows, meaning there’s currently a much smaller difference in yield between a high yield bond and a comparable Treasury. At the same time, some high yield prices have reached all-time highs. In other words, investors aren’t being rewarded that much for holding high yield, traditionally viewed as a risky asset class. The chart above shows the Barclays US Corporate High Yield Average OAS through 3/13/2013. OAS stands for Option-Adjusted Spread, or the amount by which a bond’s yield exceeds the yield of a similar duration Treasury when accounting for any optionality embedded in the bond [check out the Better Than AGG Total Bond Market ETFdb Portfolio]. [...]

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Active ETF Investing: 3 Things To Consider

Aaron Levitt — Tue, 30 Apr 2013 13:00:07 +0000

While the bread-and-butter of the ETF industry has been index-tracking products, active ETFs are quickly growing in popularity as several funds have gained critical mass with investors. There are now more than 55 different active ETFs with a combined $13 billion and counting in total assets under management. More importantly, these funds have allowed retail investors to apply professional management to a variety of asset classes and strategies [see 10 Questions About ETFs You've Been Too Afraid To Ask]. What’s the Appeal? For investors, there’s a lot to like about active ETFs. First, given the markets heavy volatility over the last few years, active ETFs–because they are managed by a professional–have the ability to shift allocations and positions according to the economic environment. Recent studies have shown that managers with high “active shares”–or the percentage of a fund’s weight-adjusted portfolio that differs from its benchmark–can produce extra returns for portfolios. Typically, [...]

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The Great Duration Rotation Continues, But For How Long?

Russ Koesterich — Sat, 20 Apr 2013 01:00:51 +0000

Matt Tucker, CFA, is the iShares Head of Fixed Income Strategy and a regular contributor to the iShares Blog. In an earlier post I examined the mysterious rise in interest rates that we have seen in the first quarter the past few years. Each year we’ve seen rates creep higher from January to March, and each year rates have ended December lower than where they started out earlier in the year. While we have no way of knowing if this will be the case again in 2013, ETF flows in Q1 definitely illustrated investors’ concerns that the slight rate rise we were experiencing was a taste of things to come [see 7 Articles ETF Investors Must Read: 4/18]. In particular, we saw large shifts within the fixed income ETF category as investors moved out of funds with more exposure to interest rates and into funds with less exposure. Here were the three [...]

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High Yield Bond ETFs Battle For Inflows: HYG vs. JNK

Stoyan Bojinov — Fri, 12 Apr 2013 13:00:53 +0000

Interest in high yield bond ETFs has been on the rise ever since the Federal Reserve implemented its ultra-low rate policy following the 2007 housing market bubble. This breed of fixed-income securities has been popular among investors of all sizes looking to beef up their portfolio’s current return without incurring handfuls of volatility. High yield bonds commonly boast risk-return profiles that bear a close resemblance to safer, lower-yielding investment grade debt securities [see 101 High Yielding ETFs For Every Dividend Investor]. While there have been plenty of new entrants to the High Yield Bonds ETFdb Category over the years, two funds remain safely atop the list: the iShares iBoxx High Yield Corporate Bond Fund and the State Street SPDR Barclays Capital High Yield Bond ETF . Meet the Competitors With over 20 high yield bond ETFs on the market, HYG and JNK separate themselves by being the biggest funds in the space, boasting [...]

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2 Factors Keeping a Lid on Interest Rates

Russ Koesterich — Mon, 01 Apr 2013 19:06:45 +0000

Despite talk of an imminent sharp rise in interest rates, the yield on the 10-year Treasury note is back below 2%. This is more evidence that the much vaunted “Great Rotation” out of bonds has yet to occur. (Otherwise, bond prices would have fallen and yields would have gone up.) The great rotation was always more myth than reality. In fact, the fuel for the equity rally has been coming out of cash, not out of bonds being sold. We had more evidence of that last week. Fund flows for the week ending March 20th were up another $2.6 billion for stocks, a slowdown from previous weeks, while bond flows were substantially higher, up $3.7 billion on the week, according to BlackRock data. Normally, when the economy is improving – even if the pace is relatively slow – that environment should support interest rates rising. But right now there are [...]

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The New Fixed Income World

Russ Koesterich — Mon, 25 Mar 2013 17:27:47 +0000

In previous blog posts, I wrote about how the economic and investment world has evolved over the past five years. Now, as the latest Federal Reserve meeting finishes up, I wanted to delve a little more into how the fixed income landscape in particular has changed, thanks in a big part to the actions of the Fed. Here are 3 reasons why it’s not your father’s (or mother’s) fixed income landscape anymore. Intentional negative real short-term interest rates. Since the financial crisis started in late 2008, nominal short-term interest rates have been close to zero and real short-term interest rates have averaged around -1.5%, much lower than their long-term average around 2%. While this isn’t the first time the United States has experienced a lengthy period of negative real rates (remember the 1970s?), it’s arguably the first time in more than 50 years that the Federal Reserve has intentionally been [...]

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ETF Insider: Stocks Drift As “Fiscal Cliff” Nears

Stoyan Bojinov — Sat, 08 Dec 2012 14:00:33 +0000

Aside from short-lived spurts of optimism and pessimism fueled by dramatic headlines, equity markets remained fairly calm this week as looming “fiscal cliff” woes kept a lid on investors’ confidence. On the international front, the Reserve Bank of Australia cautiously lowered its benchmark interest rate down to 3.0% while eurozone GDP contracted by 0.6% for the quarter. At home, economic releases were generally upbeat throughout the week; investors digested better-than-expected nonfarm payrolls data along with a decrease in the unemployment rate, marking another stride forward in the sluggish domestic labor market recovery [see Free 7 Simple & Cheap All- ETF Model Portfolios]. Actionable ETF Trade Ideas Our picks from Monday’s Insider posted disappointing performance results as sideways price action on Wall Street threw off the timing on two of our recommendations. Below, we highlight how our trade ideas fared during the week [sign up for a free trial of ETFdb Pro to get actionable ETF [...]

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ETF Insider: Fiscal Cliff Woes Simmer On Tax Talks

Stoyan Bojinov — Mon, 03 Dec 2012 18:45:48 +0000

Stocks kicked off the week with an early pop as Treasury Secretary Geithner’s prediction that Republicans would budge on the issue of higher tax rates for the wealthiest of Americans inspired confidence that the much-feared “fiscal cliff” could be avoided. Clouds of uncertainty continue to loom over the global manufacturing sector as mixed data took center stage Monday morning; China’s manufacturing activity is once again showing signs of expansion, while the most recent domestic ISM figure missed analysts estimates [see Free 7 Simple & Cheap All-ETF Portfolios]. Weekly Outlook Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors: CurrencyShares Australian Dollar Trust : This Aussie dollar ETF may gap tomorrow morning as investors digest the overnight Reserve Bank of Australian interest rate decision. Analysts are expecting for the benchmark rate to drop from 3.25% to 3.0%, while the economic [...]

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Hunt For Yield: How Do All The High Yielding ETFs Stack Up

Michael Johnston — Wed, 31 Oct 2012 13:00:19 +0000

Yield, it seems, continues to be on the minds of investors everywhere. With interest rates continuing to hug record lows, finding meaningful current returns has become a continuous struggles for a wide range of investors. Many asset classes that traditionally supply meaningful yields have dried up, sending investors on a quest for alternatives that can potentially fill the yield void. Many have ventured off the beaten path, embracing securities that weren’t necessarily on their radar screens prior to the recent recession [see Monthly Dividend ETFdb Portfolio]. Below, we profile a handful of asset classes that have historically been known as destinations for yield-hungry investors. Some of these continue to offer hefty distributions, while others have less to offer. Fixed Income: Long-Term Treasuries The iShares Barclays 20+ Year Treasury Bond Fund has long been popular with investors looking to generate yields without taking on substantial credit risk. But with interest rates [...]

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Senior Bank Loans: High-Yield With Perks

Stoyan Bojinov — Thu, 25 Oct 2012 11:00:47 +0000

With interest rates stuck at all-time lows, and expected to remain there for some time, investors of all walks have been eager to beef up their portfolio’s current income. Luckily, the ETF universe is vast and investors have handfuls of options when it comes to generating yield; within the fixed-income market, one asset class in particular has managed to fly under the radar for most, although it warrants a closer look from anyone looking to tame overall volatility without sacrificing yield [see Monthly Dividend ETFdb Portfolio]. With ETFs opening up the doors to the global fixed-income market to mainstream investors, many have been quick to flock to well-known segments of the high-yield universe; “junk bonds” from U.S. and foreign issuers have garnered tremendous interest as this asset class has demonstrated the potential to deliver attractive distributions without taking on exorbitant risk. As such, it’s not terribly surprising to see that the [...]

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ETF Database » HYG

4 Reasons To Still Hold High Yield

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Active ETF Investing: 3 Things To Consider

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The Great Duration Rotation Continues, But For How Long?

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High Yield Bond ETFs Battle For Inflows: HYG vs. JNK

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2 Factors Keeping a Lid on Interest Rates

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The New Fixed Income World

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ETF Insider: Stocks Drift As “Fiscal Cliff” Nears

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ETF Insider: Fiscal Cliff Woes Simmer On Tax Talks

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Hunt For Yield: How Do All The High Yielding ETFs Stack Up

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Senior Bank Loans: High-Yield With Perks

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