In a changing fixed-income market environment, investors have to carefully balance yield generation with rising interest rates that are likely to result in slower economic growth, and perhaps even a recession. Some have looked into the high-yield, debt market as a means to generate attractive income opportunities and hedge potential interest rate risks. Others are more cautious due to concerns about the effect rising interest rates will have on the economic outlook.
On the upcoming webcast, Everything You Need to Know About High Yield Bonds in Today’s Market, Michael DePalma, CEO and Senior Portfolio Manager at Phase Capital, and Michael Venuto, Chief Investment Officer of Toroso Asset Management, will outline the benefits of an actively managed approach to high yield bonds to help financial advisors enhance their fixed-income portfolios.
For example, the High Yield ETF (NasdaqGM: HYLD) seeks high current income with a secondary goal of capital appreciation. The sub-advisor seeks to achieve the fund’s investment objective by selecting a focused portfolio of high-yield debt securities, which include senior and subordinated corporate debt obligations like loans, bonds, debentures, notes and commercial paper.
HYLD does not have any portfolio maturity limitation and may invest its assets in instruments with short-term, medium-term or long-term maturities. It invests at least 80% of its net assets in high-yield debt securities. The ETF shows a 7.68% 30-day SEC yield.
“HYLD takes a value-based approach to credit selection, focusing on smaller issuers where there is less competition, that offer the opportunity for generous risk-adjusted yields,” according to Eve Capital.
The active high-yield bond ETF also follows a 360-degree risk management process that looks beyond fundamentals to get a complete picture of the risks that may impact the portfolio, taking into account macroeconomic and business cycle factors, credit and interest rate risk, as well as issuer specific risk.
Financial advisors who are interested in learning more about the high-yield market can register for the Wednesday, November 28 webcast here.