We have mentioned in recent recaps that the two largest High Yield Corporate Bond ETFs HYG (iShares iBoxx High Yield Corporate Bond, Expense Ratio 0.50%) and JNK (SPDR Barclays Capital High Yield Bond, Expense Ratio 0.40%) have impressively pulled in new assets year to date to the tune of >$2.7 billion and >$1.6 billion on very tight intraday trading ranges for at least the past two weeks.
The newest round of inflows puts the assets under management level for HYG at north of $17.4 billion and $11.3 billion for JNK.
Other notables in the category in terms of their overall fund sizes are SJNK (SPDR Barclays Capital Short Term High Yield Bond, Expense Ratio 0.40%, $4.02 billion in AUM), HYS (PIMCO 0-5 Year High Yield Corporate Bond, Expense Ratio 0.55%, $2.7 billion in AUM), PHB (PowerShares Fundamental High Yield Corporate Bond, Expense Ratio 0.50%, $591 million in AUM), and HYLD (Peritus High Yield, Expense Ratio 1.25%, $436 million in
AUM).
From a yield standpoint it is hard to ignore that HYLD sports a 9.84% yield at these levels, as compared to the rest of this group which have yields in the case of JNK of 5.96% and HYG of 5.66%, with the rest of the pack ranging from the 4.4% to 5.46% range.
It is also important to mention that HYLD is the only actively managed High Yield Corporate Bond among these alternatives, while PHB since it follows a RAFI fundamental based strategy may also be considered active if not quasi-active or quantitative by most as opposed to a straight forward passive index.
We have found in the past that when prices and credit stabilize in the High Yield Corporate Bond space, that portfolio managers will often look for ways to attain yield, especially when more broadly, equity prices are also rising as yield opportunity in equities starts to diminish.
Thus, the recent inflows in HYG and JNK are not terribly surprising given the backdrop and current market atmosphere, but what is surprising is the general lack of inflows and activity in some of the others here, (i.e. PHB +$6 mln YTD, HYLD +$4 mln YTD, HYS $-147 mln YTD, and SJNK pulling in a respectable $154 mln YTD in new assets). We would expect an uptick in interest in all of the aforementioned names in coming weeks as we break out of the volume doldrums of this shortened week.
AdvisorShares Peritus High Yield ETF
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