HYG Stock Recent News

iShares iBoxx $ High Yield Corporate Bond ETF is the largest “junk bond” ETF in the market and is often used as a benchmark. The yield is attractive, but both price and distributions have suffered a decay for years. If HYG doesn't look compelling as a long-term investment, it may be useful in tactical allocation strategies.

Statistically, one of the most bullish days of the year, July 1st was rather surprising. Our family of stock market ETFs was not so happy on Monday.

During LSEG Lipper's fund flows week that ended June 19, 2024, investors were overall net redeemers of fund assets for the first week in three, removing a net $30.0 billion. Taxable bond funds, alternative investments, and tax-exempt bond funds posted net inflows. Conventional equity funds posted a weekly return of positive 0.19%, the third straight week of gains.

During LSEG Lipper's fund-flows week that ended June 5, 2024, investors were overall net purchasers of fund assets for the sixth week in seven, adding a net $39.4 billion. Mixed-assets funds (-$389 million) and alternative investments (-$186 million) reported outflows. In aggregate, spot bitcoin ETFs saw an inflow (+$1.2 billion) over the week, led by Fidelity Wise Origin Bitcoin Fund (FBTC) which logged its largest inflow (+$602 million) since the week ending March 13, 2024.

The iShares iBoxx $ High Yield Corporate Bond ETF is the largest "junk bond" ETF. The PIMCO 0-5 Year High Yield Corporate Bond Index ETF has better return data but seems to have a higher risk portfolio. Both ETFs are reviewed in depth and then compared. My conclusion: it is a toss-up as to which is the better ETF to hold short-term and/or long-term.

The U.S. interest rate environment is highly uncertain and though we might see lower interest rates in late 2024, there's no way to be sure.. Although I hold a specific view of interest rates, many might disagree.

Federal Reserve hikes have led to sharply higher rates across fixed-income asset classes. High-yield bonds and senior loans offer particularly attractive yields, in the 7.5% - 10.5% range. Yields are much higher than in the past, and when compared to equities.

High-yield, or “junk,” bonds outperformed in a turbulent April for financial assets, showing surprising resilience despite a sharp spike in volatility in benchmark borrowing rates.

Default rates for high-yield bonds are rising, reaching 4.5% in December 2023. Credit spreads for high-yield bonds are narrowing and currently below historical averages. Risk-adjusted returns for high-yield bonds are weak, treasuries look stronger in this regard.

Some of the larger, more well-known ETFs have significant drawbacks and stronger peers. These include HYG, BIL, and MORT. A quick explanation of the shortcomings of these ETFs, and some stronger alternatives, follows.