SJNK and VCSH have already caught investors’ attention this year, having added $1.65 billion and $1.33 billion, respectively, in new assets. VCSH, which charges just 0.12% per year, has an average duration of 2.8 years. The ETF is rated overweight by S&P Capital IQ.
SJNK, with a 30-day SEC yield of 5.29%, has a modified adjusted duration of 2.43 years, or just over half that found on traditional junk bond ETFs.
SJNK also offers investors a liquidity advantage, a trait that should not be underestimated when considering that liquidity is usually on the tips of critics’ tongues when question junk bond ETFs. The ETF’s underlying index is focused on more liquid segments of the short-term high yield debt market as it only holds bonds with at least $350 million in face amount outstanding. S&P Capital IQ has a marketweight rating on SJNK. [Shorter is Better for This Junk Bond ETF]
PowerShares S&P 500 Low Volatility Portfolio