Macroeconomic uncertainty may have mounted in March, but high yield industry sectors still displayed room to grow.
BondBloxx commentary noted that in March, total return performance was positive for all seven high yield industry sectors. The BondBloxx research also added that all high yield industry sectors saw credit spreads tighten that month, indicating potential lower investment risk.
“Within U.S. high yield industry sectors, we remain constructive on high yield industries that demonstrate strong fundamentals and resilience in the current economic climate, including Core Industrial, Consumer Cyclical, and Energy,” BondBloxx noted.
See More: BondBloxx Fixed Income March 2024 Update
Within its expansive ETF library, BondBloxx offers an array of funds that can provide targeted exposure to specific industry sectors. One such fund is the BondBloxx USD High Yield Bond Consumer Cyclicals Sector ETF (XHYC ).
The fund primarily invests in high yield bonds within the consumer cyclicals sector, including the automotive, real estate development, and leisure subsectors, among others. According to BondBloxx, the consumer cyclical sector saw a total return of 1.4% in March.
Investors seeking core industrial exposure could consider the BondBloxx USD High Yield Bond Industrial Sector ETF (XHYI ). The ETF focuses exposure on junk bonds within the industrial sector, including subsectors such as basic materials, capital goods, and transportation and services. Much like the consumer cyclical sector, core industrials saw a 1.4% total return in March.
Likewise, the energy sector also experienced 1.4% in total returns for the month. The BondBloxx USD High Yield Energy Sector ETF (XHYE ) can provide investors with exposure to the high yield sector. The fund invests in junk bonds from a variety of subsectors, including oil refining, gas distribution, and oil field equipment and services, among others.
Robust Flows
All three of these ETFs have seen strong net flows over the last month, signaling that BondBloxx’s message may be resonating with investors. XHYC has witnessed $14.87 million in net flows, while XHYI has seen $5.64 million. Net flows over the last month have been particularly strong for XHYE, with the fund gaining $25.25 million.
Each of the three funds has a net expense ratio of 0.35%. BondBloxx currently has 24 ETFs listed in the U.S., representing over $2.8 billion in assets under management.
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