BondBloxx Investment Management has launched its first product suite of seven exchange traded funds. The fixed income funds, which begin trading today on NYSE Arca, offer precise, index-based exposure to the high-yield asset class and allow investors the opportunity to diversify and manage risk to the industry sector.
“Until today, fixed income investors could not execute sector-specific views in high yield bonds through ETFs,” said BondBloxx founder Leland Clemons. “We are excited to bring the ETF benefits of efficiency, transparency, and liquidity to fixed income investors with first-to-market products that enable what we believe is a more precise portfolio construction.”
The funds are passively managed and track rules-based sub-indexes of the ICE BofA US Cash Pay High Yield Constrained Index.
The U.S. high-yield bond funds and the sectors they cover are:
- The BondBloxx US High Yield Energy Sector ETF (NYSE Arca: XHYE) targets the energy sector including the exploration & production, gas distribution, oil field equipment & services, and oil refining & marketing sub-sectors.
- The BondBloxx US High Yield Industrial Sector ETF (NYSE Arca: XHYI) targets basic materials, capital goods, transportation, and services sub-sectors.
- The BondBloxx US High Yield Financial and REIT Sector ETF (NYSE Arca: XHYF) targets banking, financial services, insurance, and REIT sub-sectors.
- The BondBloxx US High Yield Telecom Media & Technology Sector ETF (NYSE Arca: XHYT) targets the telecom, media, and technology sectors, including the telecommunications, communication services, technology & electronics, and media sub-sectors.
- The BondBloxx US High Yield Healthcare Sector ETF (NYSE Arca: XHYH) targets the healthcare sector, including the health facilities, health services, managed care, medical products, and pharmaceuticals sub-sectors.
- The BondBloxx US High Yield Consumer Cyclicals Sector ETF (NYSE Arca: XHYC) targets the consumer cyclicals sector, including the automotive, leisure, real estate development & management, department stores, and specialty retail sub-sectors.
- The BondBloxx US High Yield Consumer Non-Cyclicals Sector ETF (NYSE Arca: XHYD) targets the consumer non-cyclicals sector, including the consumer goods, discount stores, food & drug retail, restaurants, and utilities sub-sectors.
BondBloxx was founded by ETF industry leaders Leland Clemons, Joanna Gallegos, Elya Schwartzman, Mark Miller, Brian O’Donnell, and Tony Kelly. The team has collectively built and launched over 350 ETFs at firms including BlackRock, JPMorgan, State Street, Northern Trust, and HSBC.
“Our conversations with investors have reinforced what we already knew – there is significant demand for more targeted fixed income products,” said BondBloxx co-founder Tony Kelly. “Our initial product suites aim to create a full toolkit for high yield investors looking to implement their specific views on the market, and we anticipate extending this approach to other fixed income asset classes.”
The funds launching today each have an annual expense ratio of 0.35%. BondBloxx has filed a prospectus with the SEC with proposed details for a second set of funds.
For more news, information, and strategy, visit the Institutional Income Strategies Channel.