The Current Economy is a Gift to High Yield

Many Wall Street observers and insiders had predicted that a recession would hit the U.S. this year. But it’s looking as though the odds of a downturn have been overstated. And that’s good news for high-yield fixed income.

During a webcast hosted by VettaFi, BondBloxx partner JoAnne Bianco said that the economy is proving sturdier than expected. “We believe that there is a very limited chance of a recession through the end of the year,” Bianco said. “We also think that the likelihood of a deep recession at any point in the near future…has significantly decreased.”

See more: “High Yield Continues to Bring the High Returns

The surprisingly strong economy has been a boon to high yield. The asset class is currently yielding nearly 9%. “This is very positive for high yield, since resilient economic conditions are supportive of the asset class,” she added.

For investors seeking precise exposure to high-yield bonds, BondBloxx offers a suite of seven sector-specific high-yield bond funds. The firm also recently listed its first active ETF: the BondBloxx USD High Yield Bond Sector Rotation ETF (HYSA). Subadvised by Macquarie Asset Management, HYSA seeks to maximize total return by allocating among precise high-yield bond sector ETFs.

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.

For more news, information, and analysis, visit the Institutional Income Strategies Channel.