85.85 -0.35 (-0.41%)
Pre-Market: 6:13AM EDT
|Bid||85.86 x 46000|
|Ask||86.22 x 1000|
|Day's Range||85.97 - 86.20|
|52 Week Range||79.55 - 87.04|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.27|
|Expense Ratio (net)||0.49%|
The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: HYG ), the largest high-yield corporate bond exchange traded fund by assets, is lower by about half a percent this month, but amid the intensifying ...
Mutual funds and ETFs that invest in high-yield bonds yield greater returns than government securities, but with additional and often significant risk.
On May 8, the bond market raised a red flag to investors that demand for U.S. Treasuries could drop low enough to create a spike in yields. Bids for the monthly U.S. Treasury auction of 10-year notes exceeded the offering by only 2.17 times, the lowest demand at a monthly auction since 2009, according to Bloomberg. Ten-year Treasury yields are currently at just 2.4 percent, near their lowest levels of the past year.
High-yield corporate bonds are off to the best start to a year since 2009 after the Fed’s dovish pivot.
The search for high-yield funds is not as difficult as it was in the past, especially if you are looking in the ETF universe. However, choosing the best high-yield ETFs in 2019 may prove to be a challenge in the current economic environment.When investors are looking for high yields, they are typically looking for income from investments. This income can come from dividend stocks, high-yield bonds or a combination of both. High-yield ETFs can conveniently package together a targeted selection of high-yield securities that share one particular objective or as a broad, and diverse range of holdings in one, low-cost portfolio.Investors looking for the best high-yield ETFs for 2019 are wise to consider several funds from different categories and then choose one or a combination that works best for their personal investment objectives and portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Top 7 Service Sector Stocks That Will Pay You to Own Them With that backdrop in mind, and in no particular order, here are the best high-yield funds for 2019 and beyond: Best High-Yield ETFs: Vanguard High Dividend Yield ETF (VYM)Source: Shutterstock 12-Month Yield: 3.1% Expenses: 0.06% or $6 annually for every $10,000 investedInvestors looking for income from a low-cost ETF will like what they see in Vanguard High Dividend Yield (NYSEARCA:VYM).VYM tracks the FTSE High Dividend Yield Index, which consists of about 400 stocks of companies that pay above-average dividends to investors. This combination of low expenses and high yield from dividends can make for an outstanding equity addition to an income-producing portfolio.Digging down into the portfolio composition, the fund's holdings are U.S. stocks, 90% of which are large-caps, and the greatest sector exposure is to financial services, consumer defensive and healthcare stocks. Top holdings include Johnson & Johnson (NYSE:JNJ), JPMorgan Chase (NYSE:JPM) and Exxon Mobil (NYSE:XOM). iShares iBoxx $ High-Yield Corporate Bond ETF (HYG)12-Month Yield: 5.3% Expenses: 0.49%If you want to add one of the most widely traded high-yield ETFs on the market, iShares iBoxx $ High-Yield Corporate Bond ETF (NYSEARCA:HYG).HYG tracks the Markit iBoxx USD High Liquid Index. To achieve the high yields, the average credit quality of the bonds in the HYG portfolio is below investment grade (mostly BB and B rated) and the maturities average around 4.3 years, which puts it in the intermediate range (between three and 10 years). * 7 Small-Cap Stocks That Make the Grade Although the low credit quality makes for higher market risk compared to the aggregate bond index, the intermediate term maturities reduce interest rate risk when compared to long-term bonds, which is especially important in a rising rate environment. SPDR Bloomberg Barclays High-Yield Bond (JNK)12-Month Yield: 5.6% Expenses: 0.49%If you don't mind taking a bit more market risk for a higher-yielding bond fund, SPDR Bloomberg Barclays High-Yield Bond (NYSEARCA:JNK) should be on your radar.As this high-yield ETF's ticker suggests, JNK invests in bonds with credit quality below investment grade, which are also known as "junk bonds." While these bonds don't come from the bottom of the junk pile, they are all rated below BBB, 85% of which are at BB or B ratings.To boost yields higher, as much as 15% of the portfolio consists of non-U.S. bonds and the maturities average intermediate-term. Best High-Yield Funds for 2019: VanEck Vectors High-Yield Municipal Index (HYD)12-Month Yield: 4.4% Expenses: 0.35%Investors with taxable accounts may want to consider the tax advantages of a fund like VanEck Vectors High-Yield Municipal Index (NYSEARCA:HYD).HYD tracks the performance of the Bloomberg Barclays Municipal Custom High Yield Composite Index, which consists of U.S. high-yield, long-term, municipal bonds that offer tax-free income. * 15 Stocks That May Be Hurt by This Year's Big IPOs Investors in high tax brackets may especially find this high-yield ETF attractive. After factoring in the tax-free income at the Federal level, the tax-effective yield is higher than the 4.4% Yield. Alerian MLP (AMLP)12-Month Yield: 8.3% Expenses: 0.85%ETFs that invest in master limited partnerships are some of the highest-yielding funds on the market and one of the best MLP funds is Alerian MLP (NYSEARCA:AMLP).MLP funds invest in master limited partnerships, which typically focus on energy-related industries. MLPs are similar to REITs in that they are "pass through" investment vehicles that don't pay tax at the entity level and are required to pay out most of their current income to investors. However, when purchased through an ETF, investors can avoid the headache of complex tax filings and enjoy the high yields without the extra complexities.AMLP holds just 23 stocks, such as Magellan Midstream Partners (NYSE:MMP), Plains All American Pipeline (NYSE:PAA) and Enterprise Products Partners (NYSE:EPD). Invesco KBW High Dividend Yield Financial ETF (KBWD)Source: Shutterstock 12-Month Yield: 8.1% Expenses: 2.42%If you're willing to pay high expenses and accept above-average market risk to get high yields, Invesco KBW High Dividend Yield Financial ETF (NYSEARCA:KBWD) may be the right fund for you.KBWD tracks the KBW NASDAQ index, which consists of more than 90% financial services and real estate stocks that pay consistent dividends. Most of the portfolio is concentrated in small- and mid-cap stocks, which makes for greater market risk compared to dividend funds that focus on large-caps. * 7 Winning High-Yield Dividend Stocks With Payouts Over 5% The fund only holds 40 stocks, which makes it more concentrated than most ETFs, but this is part of the strategy to get the most out of a handful of high-yield stocks like top holdings Orchid Island Capital (NYSE:ORC), New York Mortgage Trust (NASDAQ:NYMT) and BlackRock Investment Capital Corp (NASDAQ:BKCC). First Trust Preferred Securities and Income ETF (FPE)SEC Yield: 5.39% Expenses: 0.85%Investors wanting a diverse mix of holdings in a high-yield ETF should take a close look at First Trust Preferred Securities and Income (NYSEARCA:FPE).The first quality that sets FPE apart from most high-yield ETFs is that the fund is actively managed. While it makes the fund a bit more expensive than passively managed ETFs, the management team has put in a solid performance history with above-average returns.The portfolio assets include preferred and convertible securities, as well as corporate bonds and high-yield bonds. It makes it a solid addition for anyone looking for some high-yield ETFs to consider.As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. Under no circumstances does this information represent a recommendation to buy or sell securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Financial Stocks to Invest In Today * 7 Single-Digit P/E Stocks With Massive Upside * 5 Chip Stocks on the Rise Compare Brokers The post 7 of the Best High-Yield Funds for 2019 and Beyond appeared first on InvestorPlace.
No one complained that the number of stocks making new highs for Nasdaq peaked on Feb. 25 at 146 new highs. The Daily Sentiment Index (DSI) tagged 90 for both the Nasdaq and the S&P. 500 They haven't done so in tandem since Jan. 22, 2018.
The new frontier of factor investing is bond exchange-traded funds, but investors should probably wait for more evidence that they work before jumping in.
High-yield corporate bond ETFs, including the iShares iBoxx $ High Yield Corp Bd ETF (NYSEArca: HYG) and the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK), are rebounding this year, but some analysts ...
Some markets or market segments are easier to index than others. Nonstandard assets that are difficult to trade, like municipal bonds, can be difficult to index. Indeed, running an index-tracking municipal bond fund is a tricky proposition.
Last year, high-yield corporate bond exchange-traded funds (ETFs) struggled. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (NYSEARCA:JNK), the two largest U.S. junk bond ETFs, lost 2% and 3.3%, respectively, in 2018.With investors renewing their risk appetite early in 2019, junk bond ETFs are rebounding. As of Feb. 15, HYG and JNK are up an average of 6% this year. Broadly speaking, the resurgence of junk bond ETFs is a positive for equity investors. High-yield corporate debt is one of the riskier corners of the bond market, and with the correlations of this asset class to equities, investors' appetite for junk bonds is often seen as predictive for equities.There are some words of cautions investors should heed before running into junk bond ETFs over the near term. Notably, some market observers see high-yield corporate bonds as pricey, which could signal the end of the current economic expansion.InvestorPlace - Stock Market News, Stock Advice & Trading Tips"That could be bad news, especially because the prices of risky assets like stocks and high-yield bonds tend to overrun fundamentals toward the end of economic expansions," according to Barron's. * 10 Smart Money Stocks to Buy Now For investors willing to take on some added risk in search of higher yields, here some junk bond ETFs to consider right now. Junk Bond ETFs: Xtrackers Low Beta High Yield Bond ETF (HYDW)Expense Ratio: 0.25% per year, or $25 on a $10,000 investment. Trailing-12-Month Yield: 4.3%The Xtrackers Low Beta High Yield Bond ETF (NYSEARCA:HYDW), which tracks the Solactive USD High Yield Corporates Total Market Low Beta Index, is one of the junk bond ETFs that is ideal for investors looking to reduce some of the volatility associated with this asset class.The objective of this junk bond ETF is to target higher-quality issues with less beta relative to the broad high-yield corporate bond market. As such, HYDW features barely any exposure to highly speculative CCC-rated bonds. Over 97% of the fund's holdings are rated BB or B. In terms of lowering beta, this junk bond ETF does that with a beta of just 0.23.HYDW has a modified duration to worst of 3.6 years and a yield to worst of 5.85%. While lower beta junk bonds may yield less than traditional junk bonds, HYDW's trailing 12-month yield of 4.3% is still solid. Over the past year, HYDW's upside capture ratio is 70.32%. VanEck Vectors Emerging Markets High Yield Bond ETF (HYEM)Expense Ratio: 0.4% TTM Yield: 5.5%High-yield corporate bonds are not confined to the U.S. There is a big universe of these bonds issued by companies outside the U.S., and the VanEck Vectors Emerging Markets High Yield Bond ETF (NYSEARCA:HYEM) is one of the top junk bond ETFs for accessing emerging market high-yield corporate debt.Home to $255.30 million in assets under management, HYEM follows the ICE BofAML Diversified High Yield US Emerging Markets Corporate Plus Index. That benchmark is comprised of dollar-denominated bonds.HYEM holds nearly 500 bonds, over 30% of which are issued by Chinese, Brazilian or Turkish companies. This junk bond ETF compensates investors for the risk with a 30-day SEC yield of 7% and a trailing-12-month yield of 5.5%. HYEM's effective duration is 3.5 years. * 7 Financial Stocks With Accelerating Growth "Emerging markets high yield corporate bonds have historically provided a yield advantage over their U.S. counterparts, though the relationship has inverted several times historically," according to VanEck. "The real and perceived additional risks associated with emerging markets, including political and liquidity risks, have generally led investors to demand a higher yield from an emerging market corporate bond versus a U.S. one, assuming all else equal (e.g., same industry and credit rating)." WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond Fund (SFHY)Expense Ratio: 0.38% TTM Yield: 5%An overlooked option in the junk bond ETF arena, the WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond Fund (NASDAQ:SFHY) has the dual advantages of lower duration and an emphasis on higher-quality debt.SFHY's underlying index, the WisdomTree Fundamental U.S. Short-term High Yield Corporate Bond Index, is designed to identify domestic high-yield corporate bonds with favorable fundamental and income traits."The HY corporate market, as represented by the Bloomberg Barclays U.S. Corporate High-Yield Index, experienced a bit of a whipsaw effect last year," said WisdomTree in a recent note. "The market saw positive, albeit modest, gains through the first three quarters of last year, as spreads remained low to flat. However, the fourth quarter saw a drop-off across all classes, and market performance took a significant hit, ending the year in negative territory."SFHY's effective duration is just 2.14 years, but its 30-day SEC yield is 5.1% and its TTM yield is 5%. SPDR Nuveen S&P High Yield Municipal Bond ETF (HYMB)Expense Ratio: 0.35% TTM Yield: 4%As its name implies, the SPDR Nuveen S&P High Yield Municipal Bond ETF (NYSEARCA:HYMB) is a junk bond ETF dedicated to high-yield municipal bonds, not corporate debt. This is one of the better junk bond ETFs for conservative investors looking for an added yield kick to high-grade municipal bond exposure.Due to the fact that HYMB focuses on municipal bonds, this junk bond ETF is usually less volatile than its more traditional rivals. Over the past three years, HYMB's annualized volatility was just 4% compared to an average of 5.75% for HYG and JNK.HYMB holds about 1,350 bonds, about 47% of which are healthcare or industrial revenue bonds. Nearly 29% of the fund's holdings are special tax or education bonds. Debt issued by municipalities in California and Illinois combine for over 23% of HYMB's roster. * 10 Hot Stocks Leading the Market's Blitz Higher HYMB has an option-adjust duration of 8.8 years, a 30-day SEC yield of 4.2% and a TTM yield of 4%. IQ S&P High Yield Low Volatility Bond ETF (HYLV)Expense Ratio: 0.4% TTM Yield: 4.2%The IQ S&P High Yield Low Volatility Bond ETF (NYSEARCA:HYLV) is just two years old, but in those two years, the fund has become one of the best junk bonds ETFs for investors looking to trim volatility. HYLV targets the S&P U.S. High Yield Low Volatility Corporate Bond Index.That index "is designed to measure the performance of U.S. high yield corporate bonds with potentially low volatility. The index is comprised of bonds from the S&P U.S. High Yield Corporate Bond Index and is a modified market value weighted index with a 3% cap on any single issuer," according to S&P Dow Jones. HYLV holds just over 400 funds with an effective duration of 4.24 years. As a volatility reducing strategy, this junk bond ETF's holdings are on the higher end of the high-yield ratings spectrum as about 84% of the fund's holdings are rated BB+, BB or BB-. At the end of last year, HYLV had a 30-day SEC yield of 5.6%.As of this writing, Todd Shriber did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Cheap Stocks to Buy Right Now * 5 Stocks Under $5 to Buy Before They Soar * 5 Consumer Stocks to Cash Out Of Compare Brokers The post 5 Junk Bond ETFs That Could Shine appeared first on InvestorPlace.
Despite the momentum in the riskier equity market, exchange traded fund investors continued to favor conservative bets and yield-generating plays. Among the most popular ETF plays of the past week, six ...
High-yield corporate bond exchange traded funds, such as the iShares iBoxx $ High Yield Corp Bond ETF (HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK), struggled last year. Some market observers believe the junk bond rally could be short-lived and that the asset class could disappoint again this year. “According to Bloomberg, high yield bonds limped into 2019 after suffering from a December selloff that was the worst month for the asset class since 2011,” said State Street in a recent note.
Fallen angels, investment grade debt that has been downgraded to junk bond status, threaten to shake up both the bond and stock markets.
Exchange-traded fund (ETF) flows are showing that a risk-on sentiment is slowly creeping back into the markets, making the case for high-yield bond funds again. A volatile end to 2018 no doubt elicited a risk-off sentiment that permeated throughout the capital markets, but thus far in 2019, high-yield bond funds experienced an aggregate one-month inflow of $2.2 billion, according to data from XTF. According to Guggenheim Partners’ Scott Minerd, a spike in corporate defaults could be exactly what causes the party to end for all markets.
This could well be the year that "fallen angels," or former investment-grade debt that gets downgraded to speculative, shapes up as one of the more compelling stories and poses the greatest risk to a sector that has attracted considerable levels of investor cash.