Investors’ concerns have centered on ETFs tracking less-liquid sectors of the fixed-income market, such as corporate junk bonds and muni bonds. Due to increased regulations, a consequence of the Dodd-Frank Act, banks face more scrutiny on balance sheets, leverage and capital. That has sparked increased usage of ETFs for fixed-income exposure in place of derivatives. [Institutions Increasing Use of ETFs]
Typically, when advisors and investors see light volume, the area is red-flagged to avoid it. Consequently, a broad swathe of ETF options may be needlessly overlooked by many due to misconstrued concerns. However, those concerns are not relevant to HYLD, which is generally an efficient, liquid product. [Learn About ETF Liquidity and Market Making]
AdvisorShares Peritus High Yield ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of HYLD.