This High Yield Low Vol ETF Has Taken in Over $500 Million YTD | ETF Trends

As investors look for income while avoiding exposure to high volatility, one fund in DWS’ lineup of ETFs is continuing to rake in assets. 

The Xtrackers Low Beta High Yield Bond ETF (HYDW) tracks an index of “junk” bonds — debt issued by borrowers with a higher risk of default — that exhibit lower market beta, meaning HYDW tries to be less risky than the overall high-yield debt market. 

HYDW provides advisors with a lower risk approach to a traditionally higher risk investment style. Given the challenging fixed income market in 2022, advisors are searching for yield but want to avoid adding significant vol,” said Todd Rosenbluth, head of research at VettaFi.

HYDW has seen $516 million in net inflows year to date, accreting $97 million in flows between August 19 and September 19, according to VettaFi.

With HYDW, investors should expect less of a bumpy ride than the Xtrackers USD High Yield Corporate Bond ETF (HYLB), which offers broad exposure to the high-yield debt category. Since January 1, HYLB has seen $2.4 billion in net outflows. The fund has seen $563 million in net outflows in the past month, as of September 19.

HYDW is priced competitively at 20 basis points and has attracted a decent amount of assets since its launch. Incepted in early 2018, the fund has garnered $1.4 billion in assets under management.

YDW might be a good choice for investors who want the higher returns that come with the risk of junk debt but want to mitigate some of that risk by tilting toward higher-quality issuers.

HYDW boasts an impressive dividend yield. The fund has an annual dividend yield of 4.00% compared to the segment average of 3.01%, according to VettaFi.

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