The Deutsche X-trackers High Yield Corporate Bond – Interest Rate Hedged ETF (Cboe: HYIH) is one of the exchange traded funds designed specifically to keep investors engaged with high-yield corporate bonds while mitigating interest rate risk.
HYIH seeks to track the performance, before fees and expenses, of the Solactive High Yield Corporate Bond – Interest Rate Hedged Index, which aims to mitigate exposure of interest rate sensitivity across the yield curve in a rising rate environment,” according to DWS.
Due to their greater risk profile, high-yield bonds have been more correlated with major U.S. equity indices, which have experienced wider oscillations in recent months.
Fixed-income ETF investors should look into the opportunities in the short-end of the yield curve to generate income while mitigating duration risk and consider ways to blend active and passive exposures to position portfolios in today’s bond market.
At the end of the second quarter, HYIH held nearly 1,100 bonds as the fund’s ETF of ETFs structure gives a diversified asset base. The fund’s modified duration to worst is 0.50 years with a yield to worst of 5.68%, according to issuer data.