High-Yield Bonds: Active ETF Bucks Outflow Trend

An actively managed ETF, Peritus High Yield (HYLD) has bucked the 2013 trend of net outflows in the High Yield Fixed Income space, adding more than $82 million to the fund thus far this year.

The two largest funds in the High Yield Fixed Income space iShares High Yield Corporate Bond (HYG) and SPDR Barclays Capital High Yield Bond (JNK) have lost $1.78 billion and $2.98 billion respectively year to date in terms of net redemption flows, as nervous investors have staggered out of high yield corporate bonds (not only in the U.S. but also in overseas based issues) in the recent shake-out in the space.

In fact, some analysts have advocated more of an “active” approach in fixed income at this point in time given the unprecedented situation with Bernanke and the Fed’s QE programs and the dislocation it caused throughout June in bond markets, and it seems to have given some traction to actively managed fixed income products such as HYLD for instance.

HYLD currently has a yield of 8.19% compared to the 6.64% yield of JNK and 6.51% yield of HYG. HYLD has grown steadily since its inception back in late 2010, gathering a total of $260 million currently in assets under management and with twenty eight ETFs in the category currently, only fifteen of these funds, HYLD included, have over $100 million in assets under management today.

Source:  Paul Weisbruch, Street One Financial

Peritus High Yield (HYLD) is a component of the D2 Capital Management Multi-Asset Income Portfolio.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

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