BondBloxx Investment Management has launched the BondBloxx USD High Yield Bond Sector Rotation ETF (NYSE Arca: HYSA). The active ETF offers access to a high yield bond sector rotation strategy. HYSA seeks to maximize total return by allocating among precise high yield bond sector ETFs.
Macquarie Asset Management is the fund’s subadvisor, building on its partnership with BondBloxx announced earlier this year.
“We’re excited to expand the fixed income investor toolkit by providing a high yield sector rotation strategy with the transparency, liquidity, and cost efficiency of an ETF,” said BondBloxx co-founder Tony Kelly. “Investors now have the flexibility to implement a high yield sector rotation strategy in one trade, alongside the ability to execute precise views with BondBloxx’s existing sector-specific high yield bond ETFs.”
Wide Return Variations Across Sectors
The U.S. high yield bond market has historically exhibited wide variations in returns across industry sectors. BondBloxx expects this variance in returns to continue. The company believes this creates opportunities to outperform broad high yield benchmarks through a strategy overweighting and underweighting specific sectors.
There is currently over $1.3 trillion invested in U.S. high yield bonds. This includes more than $490 billion in mutual funds and ETFs focused on high yield strategies. HYSA offers the opportunity to capture outperformance by making active allocations across a range of high yield bond sector ETFs.
“This is another example of BondBloxx’s mission to use the ETF technology to offer more choice for fixed income investors, including those seeking active strategies,” Kelly added.
BondBloxx was launched in October 2021 to develop precision fixed income ETFs. Now, the issuer offers 20 funds that span U.S. Treasuries, high yield bonds, and emerging market bonds. The issuer recently crossed the $2 billion asset mark.
“BondBloxx brought innovation to the high yield bond ETF space with its initial suite of products,” said Todd Rosenbluth, head of research at VettaFi. “With this new rotation strategy, we think advisors will benefit from a more tactical approach and professional management.”
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