Credit risk is minimal as all of BSV’s holdings are rated Baa or higher. Investors will find at least two things to like about BSV. First, the ETF’s 0.1% annual expense ratio makes it cheaper than 88% of equivalent funds. Second, its average duration is just 2.7 years, according to Vanguard data.
PIMCO 0-5 Year High Yield Corporate Bond Index ETF (NYSEArca: HYS)
A move to shorter duration fare does not always have to mean a significant sacrifice in yield. Actively managed HYS proves as much with a 30-day SEC yield of 2.83%. High-yield corporate bond ETFs with shorter durations provide a nice balance for investors that want yield, but are also concerned about rising rates. [Two High Yield Bond ETFs For Rising Rates]
HYS is not yet two years old and already has $2.2 billion in assets. Home to 335 holdings, HYS has an effective duration of just 1.87 years.
PIMCO 0-5 Year High Yield Corporate Bond Index ETF
ETF Trends editorial team contributed to this piece.
Full disclosure: Tom Lydon’s clients own BSV.