True in theory. But when the fed cut rates this year the price of this fund actually went down. And two years ago when prime was at 5% the price of this fund was $6.40. So how do you explain that? I don't think hi yield follows the traditional interest rate inverse relationship. It follows the stock market ups and down and trades like equities.
Junk bond NAVs (but not ETF junk bonds) have the same relationship with interest rates as other types of bonds. The NAVs go up when junk interest rates drop and the NAVs go down when junk interest rates rise. Don't make the mistake of looking at what happened when short term overnight lending were cut by the fed or what treasury bond rates are doing. You have to look at what junk yields are doing. Junk interest rates were a point higher a while ago. The more economic uncertainty there is and the higher likelihood junk bond defaults the higher junk bond yields will be. When those rates dropped the NAV of WWEHX rose.