Tim Coyne, head of ETFs at T. Rowe Price, discussed high yield with NYSE’s Judy Shaw at Exchange 2023. In October 2022, the firm launched its fourth active fixed income exchange traded fund, the T. Rowe Price U.S. High Yield ETF (THYF).
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THYF is focused on the traditional U.S. high yield bond investment opportunity set. It invests primarily in U.S. dollar-denominated high yield corporate bonds and other fixed and floating-rate corporate securities.
The fund “really leverages our full investment research platform,” Coyne said. “It’s a high conviction strategy, which I think advisors are looking for.”
A Significant Tilt Towards Active Management
Looking broadly at the high yield space, Coyne said that “it’s about a $300 billion category.” In terms of open-ended funds, “about 80% of those assets are in mutual funds, about 18%… are in passive ETFs, and about 1% are in active ETFs.”
“So, I think there’s a clear understanding of the space by advisors,” he said. “Also, there’s a significant tilt towards active management in that space. And we feel that the combination of the ETF accompanied with our fundamental investment research is a very compelling offering for our clients.”
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