The AdvisorShares Peritus High Yield ETF (NYSEArca: HYLD) brought home a nice feather in the cap of the actively managed ETF space, claiming the prestigious five-star rating from Morningstar.
Morningstar’s five-star rating applies to both HYLD’s three-year and overall risk-adjusted performances. HYLD, which is just over three years old, is one of the most successful actively managed ETFs with $472.3 million in assets under management as of Jan. 7, according to AdvisorShares data.
Earning the five-star rating means HYLD was in the top 10% of high yield bond ETFs and mutual funds. The ETF is managed by California-based Peritus Asset Management, which specializes in unearthing opportunities in the high yield corporate and loan markets.
Not only is HYLD’s 30-day SEC yield of 8.24% fatter than many of its passively managed rivals, but the ETF’s duration of about 2.9 years is also lower, indicating the fund has diminished interest rate risk relative to other junk bond ETFs, an asset where credit, not rate risk is usually investors’ primary concern. HYLD’s duration is nearly a full year lower than that of the Barclay’s U.S. High Yield Index. [10 Bond ETFs With Yields Above 5%]
Over three-quarters of the fund’s weight is rated B+, B or B-. No issue accounts for more than 1.71% of HYLD’s weight and at the sector level, oil and gas, telecom and mining and coal combine for a third of the fund’s weight.