How to Reduce High-Yield Bond Volatility

HYDW has a higher beta counterpart, the Xtrackers High Beta High Yield Bond ETF (NYSEArca: HYUP), which also debuted in January.

The Xtrackers High Beta High Yield Bond ETF tries to reflect the performance of the Solactive USD High Yield Corporates Total Market High Beta Index, which includes the high-yield corporate bond market that exhibits higher overall beta to the broader high yield corporate bond market. Beta is a measure of a security’s sensitivity or volatility and reflects the rate of change in a security’s price that results from overall market moves. Higher yielding securities also tend to exhibit higher beta.

HYUP and HYDW charge 0.35% and 0.25%, respectively, per year, ranking both among the more cost-effective high-yield bond funds on the market today.

For more on smart beta ETFs, visit our Smart Beta Channel.