HYG: Beneath The Surface Of The 7 Percent Yield
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) provides investors with diversified high-yield bond exposure. Despite a headline yield of 7.36%, the true yield is lower due to distressed holdings skewing returns. The fund's portfolio primarily consists of BB and B-rated bonds, indicating significant credit risk.
- ▪HYG has $16.38 billion in assets under management and a 0.49% expense ratio.
- ▪The weighted average maturity of HYG's portfolio is 3.82 years.
- ▪62% of HYG's assets yield below 7%, with a median yield to maturity of 6.49%.
- ▪Extreme-yielding positions like CSC Holdings and Xerox contribute significantly to the average yield but carry high credit risk.
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