Treasury-Hedged Junk Bond ETF Outperforms as Rates Rise | Page 2 of 2 | ETF Trends

THHY has a 3.68% 30-day SEC yield and a 0.8% expense ratio.

However, potential investors should be aware that the Treasury-hedged junk bond ETF could underperform other speculative-grade debt investments in a so-called risk-off environment where U.S. Treasuries rally on safe-haven demand and high-yield bonds decline.

In contrast, the iShares and State Street offerings just provide long exposure to speculative grade, high-yield bonds. HYG has a 3.91 year duration and JNK shows a 4.12 year duration – a 1% increase in interest rates would translate to about a 3.9% decline in HYG and a 4.1% dip in JNK.

HYG has 4.22% 30-day SEC yield and a 0.50% expense ratio. JNK has a 4.69% 30-day SEC yield and a 0.40% expense ratio.

For more information on speculative-grade debt, visit our junk bonds category.