Compared to other bond-focused exchange-traded funds (ETFs) covered in the last few weeks, the iShares iBoxx $ High-Yield Corporate Bond ETF (HYG) invests in equities that carry heightened risk but offer enhanced potential returns.
HYG is one of the biggest corporate bond funds available, with more than $18 billion in assets under management. The fund invests in bonds from a variety of sectors but the biggest holding consists of communications companies??? bonds, which comprise about 25% of the portfolio.
The bond durations are no longer than 10 years, distributed somewhat evenly across the sub-10-year spectrum, with an average duration of around four years.
While HYG???s bond holdings are a little riskier than some, the upside is that they tend to pay a little higher yield than many other bond funds. At a time when bond yields are on the low side, this could make HYG more appealing to some investors.
Click here to read the full article, “Risk-Tolerant Investors May Like this High-Yield Fund.“