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As the ETF industry continues to develop, many investors have begun to move away from the more “traditional” funds in favor of ETFs that employ unique methodologies that are aimed at delivering potentially higher returns. Of the most noteworthy and popular innovations has been the development of alternative weighting strategies, specifically the RAFI methodology [see 101 ETF Lessons Every Advisor Should Learn].

Several years ago, Research Affiliates, a global lead in innovative investing and asset allocation strategies, developed the fundamentally-weighted indexes that utilize the RAFI methodology. Now there are nearly 20 different exchange-traded products that are linked to RAFI-weighted indexes. But before taking a look at the performance of these popular funds, a fundamental understanding of the unique methodology is essential.  [click to continue…]

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Of the nearly two dozen products in the High Yield Bonds ETFdb Category, it is two broad-based funds that account for the bulk of assets; HYG and JNK are by far the most popular choices in this asset class. But they are hardly the only ETF options for exposure to junk bonds; there are options for achieving very granular exposure in terms of regional exposure with products such as EMHY (emerging markets) and HYXU (global ex-U.S.). Similarly, those looking to fine tune duration have the suite of BulletShares products from Guggenheim (BSJC through BSJH) as well as funds such as SJNK

Now, thanks to both recent and more dated innovations, there are options for focusing in on a specific stretch of the credit risk spectrum as well. When it comes to junk bond ETFs, there are now several shades of credit risk, from the relatively high quality to the downright speculative. In other words, there are now ETFs for tapping into various corners of the junk bond market, from borderline-default to borderline-investment grade. 

Below, we profile a handful of junk bond ETFs that might be appealing to those looking to micro-manage their risk and return profiles [for more ETF insights, sign up for the free ETFdb newsletter]: [click to continue…]

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12 High-Yielding Monthly Distribution Bond ETFs

by on May 16, 2012 | Updated May 23, 2012

The hunt for yield continues to challenge investors of all walks in this historically ultra low-rate environment, although a certain breed of ETFs may offer a creative solution. Dividend investing is a staple strategy in any long-term portfolio and the evolution of the exchange-traded product structure has brought forth the benefits associated with monthly dividend distributions to ETF investors. […]

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Six Juicy High Yield Bond ETFs For 2012

by on January 18, 2012 | Updated January 26, 2012

Equity markets have gotten off to a solid start in the new year, although looming Euro zone debt woes continue to breed some degree of pessimism and one piece of bad news from overseas is very well capable of sparking a broad sell-off that spills over onto Wall Street. The tug of war between positive […]

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Equity markets have taken a wild ride this past year as everything from an unimaginable earthquake in Japan to a looming debt crisis in Europe has taken its toll on investors’ confidence. As 2011 draws to a close, many are left scratching their heads in confusion and uncertainty, given the predominantly gloomy economic outlook that […]

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Getting The Most Out Of Your Bond ETFs

by on November 22, 2011 | Updated September 22, 2014

Interest in achieving fixed income exposure through exchange-traded funds has been a hot topic in recent years, with some advisors expressing serious concerns over the potential shortcomings in bond ETFs while others have fully embraced the efficiencies of the exchange-traded structure [see Are Bond ETFs Broken?].

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PowerShares, one of the leading providers of alternative weighted ETFs, announced today the latest addition to its fixed income lineup. The new Fundamental Investment Grade Corporate Bond Portfolio (PFIG) will offer an alternative means of accessing high quality corporate bonds, distinguishing itself from other products in the Corporate Bonds ETFdb Category by the weighting methodology […]

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The month of May was a generally disappointing stretch for investors, as both international and domestic equity markets struggled to overcome obstacles new and old. Commodities, which had been a nice source of absolute returns for much of the last year, fell on hard times as well; precious metals went into a brief freefall, and […]

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Actively managed ETFs have been slow to gain traction so far among most investors for a variety of reasons. Higher than average fees, a boatload of academic evidence suggesting inability of active management to consistently generate alpha, and concerns about disclosure requirements leading to front-running opportunities have all contributed to the relatively slow adoption rate […]

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Innovation continues to be a defining characteristic of the quickly growing fixed income ETF space, as evidenced by the launch of the SPDR Barclays Capital Issuer Scored Corporate Bond ETF (CBND) on Thursday by State Street. The new ETF will seek to replicate the performance of the Barclays Capital Issuer Scored Corporate Index, a benchmark […]

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Rob Arnott is the founder of Research Affiliates, a global leader in innovative investing and asset allocation strategies. The firm is perhaps best known for its role in developing fundamentally-weighted indexes that utilize the RAFI methodology. This strategy involves selecting and weighting securities by fundamental measures of company size, as opposed to market capitalization. The […]

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The last few years have seen tremendous growth in ETF assets, as investors have gradually embraced the exchange-traded structure as a tool for establishing exposure to everything from emerging markets to micro cap stocks to commodities. Interest in bond ETFs has been particularly strong; according to year-end data from the National Stock Exchange, bond ETFs […]

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