ETF Trends
ETF Trends

The AdvisorShares Peritus High Yield ETF (NYSEArca: HYLD) is the newest entrant to the $1 billion ETF club, cementing its status as one of the largest actively managed ETFs in the process.

HYLD is managed by California-based Peritus Asset Management, which specializes in unearthing opportunities in the high yield corporate and loan markets. Earlier this year, HYLD earned the prestigious five-star rating from Morningstar. [Peritus High-Yield ETF Gets Five-Star Rating]

“We’ve seen increased interest from financial advisors, pension plans and family offices in the high yield market,” added Ron Heller, managing partner of Peritus, in a statement. “Historically low interest rates continue to hurt yield investors, and we feel that the market has come to understand that high yield bonds and leveraged loans are incredibly efficient in an active ETF structure. I’m tremendously proud of the team at Peritus and the great work they continue to do.”

HYLD currently sports a 30-day SEC yield of 7.93%, but that is not the only source of allure for prospective investors. The ETF’s duration is just 2.42 years, well below the durations found on the largest passively managed junk bond ETFs.

That has proven to be an advantage for HYLD at a time when investors are pulling capital from longer duration high-yield ETFs and reallocating some of that cash to shorter duration offerings. [Investors Flock to Short Duration Junk ETFs]

“Since HYLD focuses largely on seasoned credits with the ability to include floating rate loans and high yield equities within its portfolio, its stated duration and maturity tends to be shorter than that of the market indexes. The resulting portfolio has attracted more than $1 billion in investor assets since its December 1, 2010 launch, while striving to deliver a high, tangible income with capital appreciation as a secondary goal,” according to the statement.

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