Want a Junk Bond ETF That Trims Risk?

Related: Best Ideas for Long Duration Junk Bond Funds

SHYG’s effective duration is just 2.38 years, which is well below the durations found on traditional junk bond ETFs. Over 64% of the ETF’s holdings have maturities of 2 to 3 years or 3 to 5 years. SHYG invests at least 90% of its total assets in the component securities of the index, primarily high yield corporate debt, and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents.

Over 81% of SHYG’s holdings are rated BB or B while 13.64% carry the highly speculative CCC rating. Investors are compensated for that credit risk in the form of a 5.82% 30-day SEC yield. SHYG charges 0.30% per year, or $30 on a $10,000 investment.

For more information on the fixed-income space, visit our bond ETFs category.