ETF Trends
ETF Trends

U.S. large cap equities have of course been hitting new all times seemingly day after day lately as evidenced in the action in the SPX (S&P 500 Index), but the segment of high yield corporate bonds is well off of recent highs.

We point out recent inflows activity in the largest fund in the space HYG (iShares iBoxx $ High Yield Corporate Bond, Expense Ratio 0.50%, Yield 5.68%) today in our Money Flows recap, to the tune of at least $300 million in recent sessions, bringing the fund’s asset base north of $14 billion.

HYG has a notable edge in terms of AUM over the next largest fund in the segment, JNK (SPDR Barclays Capital High Yield Bond, Expense Ratio 0.40%, $9.5 billion in AUM, Yield 5.83%), and there are several other notables that see good daily traffic and that also have considerable assets under management in the category, including BKLN (PowerShares Senior Loan Portfolio, Expense Ratio 0.65%, $6.1 billion in AUM, Yield 4.10%), SJNK (SPDR Barclays Capital Short Term High Yield, Expense Ratio 0.40%, $4.2 billion in AUM, Yield 5.34%), HYS (PIMCO 0-5 Year U.S. High Yield Corporate Bond, Expense Ratio 0.55%, $3.2 billion in AUM, Yield 4.29%), and BSJF (Guggenheim BulletShares 2015 High Yield Corporate Bond, Expense Ratio 0.42%, $1.01 billion in AUM, Yield 3.60%).

The aforementioned funds all have north of $1 billion in assets under management, and taking into account the good assets in HYG and JNK as well, there is clearly space for multiple issuers to participate in asset growth and retention in this segment of the U.S. ETF market.

It is also important to note that there are a variety of strategies available ranging from straight passive index to actively managed here in the High Yield Corporate Market, as evidenced by the development of actively managed products such as HYLD (Peritus High Yield, Expense Ratio 1.25%, $649 million in AUM, Yield 8.16%), PHB (PowerShares Fundamental High Yield Corporate Bond Portfolio, Expense Ratio 0.50%, $609 million in AUM, Yield 4.41%), and SRLN (SPDR Blackstone GSO Senior Loan, Expense Ratio 0.70%, $587 million in AUM, Yield 3.38%) to name a few in the segment that have grown in popularity over the past several years.

Speaking of Senior Loans (BKLN and SRLN) here within the greater HY Corporate Bond space, First Trust has made some noise in 2014 with FTSL (First Trust Senior Loan, Expense Ratio 0.85%), which has raised its profile this year. Conspicuously absent from the bevy of ETF providers that participate in the High Yield Corporate Bond market is ETF giant, Vanguard.

iShares iBoxx $ High Yield Corporate Bond ETF

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com

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