In February, BondBloxx launched seven U.S. high-yield bond ETFs that offer precise, index-based exposure to the high-yield asset class and allow investors the opportunity to diversify and manage risk to the industry sector. The funds are passively managed and track rules-based sub-indexes of the ICE BofA US Cash Pay High Yield Constrained Index.
Speaking with Kailey Leinz on “Bloomberg ETF IQ,” Gallegos said that she doesn’t regret the timing of these launches “at all.”
“We like to say we’re right on time,” said Gallegos. “So, the volatility we all experienced in the first quarter really shined a light on the dispersion of returns and dispersion of exposures.”
Prior to co-founding BondBloxx, Gallegos was the head of global ETF strategy at JPMorgan Asset Management and the head of ETF product management at BlackRock’s iShares.
Gallegos explained that BondBloxx brought its ETFs to market “right when energy was an important story and an important thing that investors were looking at.” Among its offerings is the BondBloxx US High Yield Energy Sector ETF (NYSE Arca: XHYE), which targets the energy sector, including the exploration and production, gas distribution, oil field equipment and services, and oil refining and marketing sub-sectors.
The BondBloxx co-founder noted that “investors have been very underserved by the fixed income ETF product offering to date,” adding: “There isn’t enough fixed income ETF product for investors to use right now.”
“There’s no bad time to launch a good exposure,” Gallegos said. “Because of the way ETFs have penetrated portfolios and the way asset allocators use them, they [allocators] need more precise things to build their portfolios or manage their risk. We’re right on time and we’re happy that we were able to give investors these products.”
Check out the interview below. The segment on BondBloxx starts around the 15:40 mark, with the interview with Gallegos starting at around 16:55.
BondBloxx was founded by ETF industry leaders Joanna Gallegos, Leland Clemons, Elya Schwartzman, Mark Miller, Brian O’Donnell, and Tony Kelly. The team has collectively built and launched over 350 ETFs at firms including BlackRock, JPMorgan, State Street, Northern Trust, and HSBC.
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