iShares iBoxx $ High Yield Corporate Bond ETF (ARCA: HYG)

iShares iBoxx $ High Yield Corporate Bond ETF (ARCA:HYG), Quote.Headers.trade-ideas

iShares iBoxx $ High Yield Corporate Bond ETF

The Fund seeks to track the investment results of the Markit iBoxx USD Liquid High Yield Index (the Underlying Index), which is a rules-based index consisting of U.S. dollar-denominated, high yield (as determined by Markit Indices Limited (the Index Provider or Markit)) corporate bonds for sale in the U.S. The Underlying Index is designed to provide a broad representation of the U.S. dollar-denominated liquid high yield corporate bond market.

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Launched on 04/27/2016, the WisdomTree U.S. High Yield Corporate Bond ETF (BATS: WFHY) is a smart beta exchange traded fund offering broad exposure to the High-Yield/Junk Bond ETFs category of the market.

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The U.S. corporate bond market had mixed performance in Q1, with higher-rated bonds seeing slight declines and lower-rated bonds showing modest gains. Top performers include Macy&#39;s, Ally Financial, and Lincoln National Corp.

Top 10 US Corporate Bonds By Market Performance In 2024: April Update

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The U.S. high-yield corporate bond market is attracting investors seeking both returns and diversification from stocks. But beware of higher risk.

Top 10 US High-Yield Corporate Bonds With Returns Over 20% In April 2024

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Launched on 04/27/2016, the WisdomTree U.S. High Yield Corporate Bond ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/wfhy#BATS">WFHY</a>) is a smart beta exchange traded fund offering broad exposure to the High-Yield/Junk Bond ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor &amp; Index
The fund is managed by Wisdomtree. WFHY has been able to amass assets over $229.86 million, making it one of the average sized ETFs in the High-Yield/Junk Bond ETFs. This particular fund seeks to match the performance of the WisdomTree Fundamental U.S. High Yield Corporate Bond Index before fees and expenses.
The WisdomTree U.S. High Yield Corporate Bond Index is a rule-based alternatively weighted Index designed to capture the performance of selected issuers in the U.S. high yield corporate bond market that are deemed to have attractive fundamental and income characteristics.
Cost &amp; Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF&#39;s expense ratio.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.32%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it&#39;s still important for investors to research a fund&#39;s holdings.
Looking at individual holdings, Crescent Energy Finance&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/crgy#NYSE">CRGY</a>) 7.25% 5/1/2026 accounts for about 0.74% of total assets, followed by Organon Finance&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ogn#NYSE">OGN</a>) 1 Llc 5.125% 4/30/2031 and Nationstar Mtg Hld Inc 6% 1/15/2027.
The top 10 holdings account for about 6.7% of total assets under management.
Performance and Risk
The ETF has gained about 0.76% so far this year and was up about 7.77% in the last one year (as of 04/10/2024). In the past 52-week period, it has traded between $42.17 and $45.77.
The ETF has a beta of 0.48 and standard deviation of 8.78% for the trailing three-year period. With about 476 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Yield Corporate Bond ETF is not a suitable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Broad USD High Yield Corporate Bond ETF (USHY) tracks BofA Merrill Lynch U.S. High Yield Constrained Index and the iShares iBoxx $ High Yield Corporate Bond ETF (ARCA:HYG) tracks Markit iBoxx USD Liquid High Yield Index. IShares Broad USD High Yield Corporate Bond ETF&nbsp;(BATS: <a class="ticker" href="https://www.benzinga.com/stock/ushy#BATS">USHY</a>) has $11.56 billion in assets, iShares iBoxx $ High Yield Corporate Bond ETF has $16.26 billion. USHY has an expense ratio of 0.08% and HYG charges 0.49%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk Bond ETFs.
<a href="https://www.zacks.com/stock/news/2253068/is-wisdomtree-u-s-high-yield-corporate-bond-etf-wfhy-a-strong-etf-right-now?cid=CS-BENZ-FT-smart_beta_etf-2253068">To read this article on Zacks.com click here.</a>

The performance of the U.S. corporate bond market in the first quarter of the year was generally flat, though there were notable distinctions between the high-grade <a href="https://www.benzinga.com/money/high-yield-bonds">and high-yield sectors. </a>
Bonds issued by companies with higher credit ratings (BBB and above) experienced a slight downward trajectory, as showed by the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>). Conversely, lower-rated companies boasting higher yields showed modestly positive performance, as indicated by the iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>).
Also Read: <a href="https://www.benzinga.com/news/large-cap/24/04/38098774/top-10-us-high-yield-corporate-bonds-with-returns-over-20-in-april-2024">Top 10 US High-Yield Corporate Bonds With Returns Over 20% In April 2024</a>
Below is a list of U.S. corporate bonds that have exhibited the strongest performance in the last three months.
<h3 class="wp-block-heading">10) Macy&#8217;s Retail Holdings LLC 4.3% 12/43</h3>
<ul>
<li>Issuer: Macy&#8217;s Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/M#NYSE">M</a>)</li>
<li>ISIN: US55616XAJ63</li>
<li>Last price: $82.08</li>
<li>Yield to maturity (%): 5.9712</li>
<li>Maturity: 15/02/2043</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 15.83%</li>
</ul>
<h3 class="wp-block-heading">9) Ally Financial Inc. 4.7%</h3>
<ul>
<li>Issuer: Ally Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALLY#NYSE">ALLY</a>)</li>
<li>ISIN: US02005NBN93</li>
<li>Last price: $78.174</li>
<li>Type: subordinated</li>
<li>Minimum investment amount: $1,000</li>
<li>3-month performance: 16.91%</li>
</ul>
<h3 class="wp-block-heading">8) Lincoln National Corp. 7.938% 06/66</h3>
<ul>
<li>Issuer: Lincoln National Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LNC#NYSE">LNC</a>)</li>
<li>ISIN: US534187AS84</li>
<li>Last price: $74.73</li>
<li>Maturity: 17/05/2066</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 17.87%</li>
</ul>
<h3 class="wp-block-heading">7) Carvana Co. 5.875% 20/28</h3>
<ul>
<li>Issuer: Carvana Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CVNA#NYSE">CVNA</a>)</li>
<li>ISIN: USU1468GAD61</li>
<li>Last price: $65.00</li>
<li>Yield to maturity (%): 18.1963</li>
<li>Maturity: 01/10/2028</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 20.37%</li>
</ul>
<h3 class="wp-block-heading">6) Braskem America Finance Co. 7.125% 11/41</h3>
<ul>
<li>Issuer: Braskem S.A. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAK#NYSE">BAK</a>)</li>
<li>ISIN: USU1065PAA94</li>
<li>Last price: $90.85</li>
<li>Yield to maturity (%): 8.2834</li>
<li>Maturity: 15/02/2043</li>
<li>Minimum investment amount: $200,000</li>
<li>3-month performance: 20.5%</li>
</ul>
<h3 class="wp-block-heading">5) M.D.C. Holdings Inc. 3.966% 21/61</h3>
<ul>
<li>Issuer: M.D.C. Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MDC#NYSE">MDC</a>)</li>
<li>ISIN: US55616XAJ63</li>
<li>Last price: $82.08</li>
<li>Yield to maturity (%): 5.9712</li>
<li>Maturity: 15/02/2043</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 23.53%</li>
</ul>
<h3 class="wp-block-heading">4) QVC Inc. 5.95% 13/43</h3>
<ul>
<li>Issuer: QVC Inc.</li>
<li>ISIN: US747262AM52</li>
<li>Last price: $64.53</li>
<li>Yield to maturity (%): 10.4849</li>
<li>Maturity: 15/03/2043</li>
<li>Minimum investment amount: $1,000</li>
<li>3-month performance: 23.76%</li>
</ul>
<h3 class="wp-block-heading">3) At Home Group Inc. 4.875% 21/28</h3>
<ul>
<li>Issuer: At Home Group Inc.</li>
<li>ISIN: USU04798AA90</li>
<li>Last price: $47.61</li>
<li>Yield to maturity (%): 27.4573</li>
<li>Maturity: 15/07/2028</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 26.38%</li>
</ul>
<h3 class="wp-block-heading">2) Lumen Technologies Inc. 4.5% 20/29</h3>
<ul>
<li>Issuer: Lumen Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LUMN#NYSE">LUMN</a>)</li>
<li>ISIN: USU1566PAD79</li>
<li>Last price: $36.32</li>
<li>Yield to maturity (%): 33.1453</li>
<li>Maturity: 15/01/2029</li>
<li>Minimum investment amount: $2,000</li>
<li>3-month performance: 27.01%</li>
</ul>
<h2 class="wp-block-heading">Chart: Lumen Technologies Bond Outperforms Lumen Shares In 2024</h2>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8-1024x495.png" alt="" class="wp-image-277973" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113118/image-8.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">1) Beyond Meat Inc. 0.000% 21/27</h3>
<ul>
<li>Issuer: Beyond Meat Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BYND#NASDAQ">BYND</a>)</li>
<li>ISIN: US08862EAB56</li>
<li>Last price: $23.87</li>
<li>Maturity: 15/03/2027</li>
<li>Minimum investment amount: $1,000</li>
<li>3-month performance: 28.08%</li>
</ul>
<h2 class="wp-block-heading">Chart: Beyond Meat Bonds Outperform Shares In 2024</h2>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9-1024x495.png" alt="" class="wp-image-277986" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/04/04113716/image-9.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h2 class="wp-block-heading">Why Have Beyond Meat Bonds Outperformed Shares?</h2>
Beyond Meat reported higher than expected revenue in the fourth quarter of 2023, yet suffered larger losses than anticipated. Following the earnings announcement, the company committed to significantly cutting costs and enhancing manufacturing efficiency. 
These efforts improved the outlook on the company&#8217;s ability to fulfill its debt obligations, boosting investor confidence in Beyond Meat&#8217;s survival prospects, rather than reflecting a true turnaround in its long-term profitability.
Following its earnings report, Beyond Meat saw an initial market enthusiasm with rises in both bonds and shares. However, while bond values maintained their upward trajectory, the stock&#8217;s gains quickly dissipated, reversing the post-earnings uplift. 
Since the beginning of the year, Beyond Meat&#8217;s zero-coupon bond, due to mature in March 2027, has seen a notable increase of 28%, contrasting with a roughly 6% drop in the company&#8217;s share price.
Read now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/04/38091433/ai-revolution-is-underway-yet-its-economic-impact-is-several-years-off-goldman-sach">AI Revolution Is Underway, Yet Its Economic Impact Is &#8216;Several Years Off&#8217;: Goldman Sachs</a>
Image generated using artificial intelligence via Midjourney.

As U.S. interest rates continue to hover at their highest level in over two decades, investors are increasingly drawn to the realm of high-yield corporate bonds, seeking both lucrative returns and <a href="https://www.benzinga.com/money/high-yield-bonds">a diversification from stocks. </a>
The U.S. high-yield corporate bond market, as tracked by the iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>), has exhibited positive performance of late, surging by 10% from the depths seen in October 2023. 
It&#8217;s important to remember that when it comes to bonds, rates and prices move in opposite directions, meaning that as rates increase, prices decrease and vice versa.
For many traders eyeing the potential for interest rate cuts by the Federal Reserve in 2024, this could merely signify the start of a new long-term uptrend for the corporate bond market. 
Read also: <a href="https://www.benzinga.com/yield-investments">BEST HIGH YIELD INVESTMENTS TO EARN</a>
Navigating the terrain of high-yield bonds demands caution. 
High-yield bonds, also called junk bonds, are corporate bonds issued by companies with lower credit ratings than safer investment-grade bonds. These bonds receive speculative ratings below BBB from agencies like Standard &amp; Poor&#8217;s, Moody&#8217;s or Fitch. 
Behind the allure of lofty returns lies a stark reality: heightened risk. The golden rule of investment resonates loudly here — the higher risk of a company not meeting its obligations, the higher the potential reward for investors.
For those wary of investing in stocks due to a company&#8217;s bleak profit outlook, turning to bonds presents an alternative strategy by banking on the company&#8217;s potential survival until maturity.
As investors seek to capitalize on the potential rewards of these high-yield bonds, they must remain vigilant, recognizing that every glittering opportunity carries its own share of peril.
<h3 class="wp-block-heading">Top 10 US Corporate Bonds With The Highest Yield To Maturity As Of April 2024</h3>
The following are the top 10 high-yielding U.S. corporate bonds as of early April 2024, according to Public.com&#8216;s bond screener:
<ol>
<li>AMC 6.125% 05/15/2027
<ul>
<li>Issuer: AMC Entertainment Holdings (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMC#NYSE">AMC</a>)</li>
<li>Yield: 34.19%</li>
<li>Coupon: 6.125%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $48.62</li>
<li>Maturity: 05/15/2027</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>SATSX 6.625% 08/01/2026
<ul>
<li>Issuer: Hughes Satellite Systems Corp., fully owned by Echostar Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SATS#NASDAQ">SATS</a>) </li>
<li>Yield: 33.81%</li>
<li>Coupon: 6.625%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $58.47</li>
<li>Maturity: 08/01/2026</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>DISH 7.375% 07/01/2028
<ul>
<li>Issuer: Dish Network Corporation</li>
<li>Yield: 30.74%</li>
<li>Coupon: 7.375%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $46.55</li>
<li>Maturity: 07/01/2028</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>LUMN 6.875% 01/15/2028 
<ul>
<li>Issuer: Lumen Technologies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LUMN#NYSE">LUMN</a>)</li>
<li>Yield: 30.71%</li>
<li>Coupon: 6.875%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $48.70</li>
<li>Maturity: 01/15/2028</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>OPI 2.4% 02/01/2027
<ul>
<li>Issuer: Office Properties Income Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OPI#NYSE">OPI</a>)</li>
<li>Yield: 30.45%</li>
<li>Coupon: 2.4%</li>
<li>Price: $49.26</li>
<li>Maturity: 02/01/2027</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>OPI 2.65% 06/15/2026
<ul>
<li>Issuer: Office Properties Income Trust </li>
<li>Yield: 29.82%</li>
<li>Coupon: 2.65%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $58.38</li>
<li>Maturity: 06/15/2026</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>OPI 4.5% 02/01/2025
<ul>
<li>Issuer: Office Properties Income Trust </li>
<li>Yield: 28.37%</li>
<li>Coupon: 4.5%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $83.48</li>
<li>Maturity: 02/01/2025</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>AMC 5.875% 11/15/2026
<ul>
<li>Issuer: AMC Entertainment Holdings</li>
<li>Yield: 28.31%</li>
<li>Coupon: 5.875%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $60.42</li>
<li>Maturity: 11/15/2026</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>DISH 5.125% 06/01/2029
<ul>
<li>Issuer: Dish Network Corporation</li>
<li>Yield: 27.46%</li>
<li>Coupon: 5.125%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $40.22</li>
<li>Maturity: 06/01/2029</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
<li>AMC 5.75% 06/15/2025
<ul>
<li>Issuer: AMC Entertainment Holdings</li>
<li>Yield: 25.06%</li>
<li>Coupon: 5.75%</li>
<li>Coupon Frequency: Semi-annually</li>
<li>Price: $81.03</li>
<li>Maturity: 06/15/2025</li>
<li>Rating: Speculative grade</li>
</ul>
</li>
</ol>
Read now: <a href="https://www.benzinga.com/money/best-high-yield-etfs-right-now">Best High-Yield ETFs Right Now</a>
Photo via Shutterstock.

Economist Jared Bernstein has recently discussed the state of consumer debt in the U.S., shedding light on its gradual return to <a href="https://www.benzinga.com/topic/economics">pre-pandemic levels</a>.
What Happened: In an <a href="https://www.bloomberg.com/news/articles/2023-12-31/us-consumer-debt-just-returning-to-normal-levels-jared-bernstein-says?srnd=markets-vp&amp;sref=TBDibEcD">interview</a> with Bloomberg, Bernstein said this development signifies a positive step forward in the ongoing conversations about the nation&#39;s economic recovery and financial stability.
Bernstein elaborated on the surge in consumer debt that occurred during the COVID-19 pandemic.
He attributed this spike to the exceptional circumstances created by the health crisis, including widespread job losses and economic uncertainties.
Many Americans were compelled to rely on credit cards and loans to cover essential expenses, leading to historically high levels of consumer debt.
The situation is gradually improving, Bernstein said. As the economy rebounds and job opportunities expand, individuals are better equipped to manage their debts, he said.&nbsp;
This positive trend is anticipated to bolster economic recovery, as consumers with more manageable debt levels are likely to increase their spending, contributing to overall economic growth.
Additionally, Bernstein emphasized the importance of ongoing government support, such as stimulus checks and enhanced unemployment benefits, in assisting Americans in coping with the financial challenges brought on by the pandemic.
These measures have played a crucial role in providing relief to many households and preventing more severe economic hardships.
While acknowledging the presence of inflation in the economic landscape, Bernstein said it has not significantly impacted consumer debt repayment.
Also Read:&nbsp;<a href="https://www.benzinga.com/news/23/11/35740812/finance-experts-are-strongly-encouraging-consumers-to-save-as-much-as-they-can-this-holiday-season-h">Finance Experts Are Strongly Encouraging Consumers To Save As Much As They Can This Holiday Season &mdash; Here&#39;s Why</a>
He argued that addressing inflation concerns should not overshadow the progress made in stabilizing consumer debt levels, which is essential for the nation&#39;s broader economic health.
According to the report, credit card companies, including Visa Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/v#NYSE">V</a>), Mastercard Incorporated (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ma#NYSE">MA</a>), American Express Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/axp#NYSE">AXP</a>)&nbsp;and Discover Financial Services (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dfs#NYSE">DFS</a>), indicate a gradual decrease in consumer credit card balances.
This trend aligns with Bernstein&#39;s assessment of improving consumer debt conditions.
In the exchange-traded funds&nbsp;space, funds like iShares iBoxx Investment Grade Corporate Bond ETF (NYSEARCA: LQD) and iShares iBoxx High Yield Corporate Bond ETF (NYSEARCA: HYG) have been influenced by the dynamics of consumer debt&nbsp;given their exposure to corporate bonds.
Investors in these ETFs closely monitor consumer debt trends as they can impact the creditworthiness of corporate issuers.
In conclusion, Bernstein&#39;s insights offer a hopeful perspective on the trajectory of consumer debt in the United States, suggesting&nbsp;the nation is on a path towards greater financial stability in the post-pandemic era.
Now Read:&nbsp;<a href="https://www.benzinga.com/news/23/10/35256397/americans-face-historic-lack-of-affordability-in-housing-market-data-shows" target="_blank">Americans Face Historic Lack Of Affordability In Housing Market, Data Shows</a>
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock.&nbsp;

Personal Finance

US Consumer Debt Moves Toward Pre-COVID Levels: Economist Shares Top Takeaways

For the first quarter of 2024, JPMorgan Chase &amp; Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) is for overweight U.S. equity, Japanese equity, U.S. Treasury and high-yield corporate debt. The company said &#8220;cash returns are <a href="https://www.benzinga.com/markets/equities/23/11/35614060/warren-buffett-led-berkshire-hathways-ginormous-157b-cash-pile-is-nearing-levels-held-by-one-of-">set to fall</a>&#8221; and the U.S. stock market would &#8220;likely see the S&amp;P 500 test the 5,000 l<a href="https://www.benzinga.com/news/23/12/36229445/amazon-and-alphabet-top-picks-for-2024-jpmorgan-bets-on-continued-mega-cap-tech-rally">evel in 2024</a>.&#8221;
Read: <a href="https://www.benzinga.com/economics/23/12/36069647/2024-outlook-put-pause-pivot">2024 Outlook: Put, Pause, Pivot</a>
John Bilton, head of Global Multi-Asset Strategy at JPMorgan, and his team <a href="https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/portfolio-insights/pi-gaav.pdf">shared</a> insights from the Multi-Asset Solutions Strategy Summit they had recently.
&#8220;We see positive U.S. stock performance broadening beyond tech as an improving U.S. inventory cycle boosts cyclical sectors,&#8221; said Bilton. &#8220;Japanese stocks remain attractive, given rerating potential driven by corporate governance reforms.&#8221;
Here&#8217;s a quick look at their perspective on each asset class and few trading ideas around them (added by author):
<h2 class="wp-block-heading">Equity</h2>
JPMorgan is overweight on U.S., U.K. and Japanese equity, and underweight on European equity and Emerging Markets (ex-China).
<ul>
<li>U.S.: Expectations for an earnings growth estimate of 7% into the next year. Lower rates to provide support to stock multiples. Cash generation potential in U.S. equity. Equities outlook is also improving as the earnings downgrade cycle appears to be bottoming. The SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) and the Vanguard 500 Index Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>) are popular funds to gain exposure to broad-market U.S. equity.</li>
<li>U.K.: U.K. equity is cheap and supported by valuations and flows. It is a defensive market; with a positive gearing towards commodities. The iShares MSCI United Kingdom ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWU#NYSE">EWU</a>) is a popular U.K. equity tracking ETF.</li>
<li>Japan: Japanese stocks remain attractive. There&#8217;s rerating potential, given improving nominal growth in the country and scope for valuation expansion. The corporate governance reforms mandated by the Tokyo Stock Exchange should support shareholder returns and drive up ROE. The iShares MSCI Japan ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWJ#NYSE">EWJ</a>) offers exposure to Japanese equity.</li>
<li>Europe: European growth is expected to remain sluggish going into 2024. </li>
<li>EM: Emerging market equities, though cheap, lack clear catalysts for a rebound. </li>
</ul>
<h2 class="wp-block-heading">Fixed-Income</h2>
From the fixed-income space, JPMorgan is overweight U.S. Treasury and high-yield corporate. It is underweight EMD hard currency.
<ul>
<li>The prospect of rate cuts in 2024 supports a duration overweight position. Yields may begin to fall steadily as rate cuts begin.</li>
<li>Investors should prefer U.S. Treasuries to other G4 countries. Yields in the low 4s should be attractive ahead of Fed rate cuts. JPMorgan sees potential returns of 10%–20% if growth disappoints. The iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>), the iShares 7-10 Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEF#NYSE">IEF</a>) and the SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) are popular ways to get exposure to U.S. Treasury.</li>
<li>Overweight corporate high-yield debt as there&#8217;s modest scope for spread tightening. Fundamentals appear supportive with limited rise in defaults. Overall, the carry looks attractive. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>) and the iShares Broad USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USHY#NYSE">USHY</a>) are two of the largest ETFs providing exposure to high-yield corporate debt in the U.S.</li>
</ul>
<h2 class="wp-block-heading">Currency &amp; Cash</h2>
The US dollar, as tracked by the Invesco DB US Dollar Index Bullish Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), appears set to weaken in 2024. JPMorgan sees a soft landing for the greenback as growth broadens out globally.
Rate cuts possibility in the U.S. further supports a US dollar underweight position.
Bilton is also underweight on cash. &#8220;Cash returns set to fall as cutting cycle begins; long-term USD rates likely nearer 2.5% than 5.5%,&#8221; he laid out.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/11/35837453/goldman-sachs-2024-equity-outlook-winning-stocks-and-sectors-to-watch">Goldman Sachs&#8217; 2024 Equity Outlook: Winning Stocks And Sectors To Watch</a>

Analyst Color

Macro Economic Events

Broad U.S. Equity ETFs

Currency ETFs

Global

iShares Trust Barclays 7-10 Year Treasury Bond Fund

iShares Trust Barclays 20+ Year Treasury Bond Fund

PowerShares DB US Dollar Index Bullish Fund

S&P 500 Likely To 'Test The 5,000 Level': JP Morgan On Where To Allocate In 2024

In recent weeks, several bond exchange-traded funds (ETFs) have experienced a significant surge in inflows, indicating a <a href="https://www.benzinga.com/money/best-bond-etf">heightened interest among investors. </a>
This shift coincided with a market that significantly upped bets on Federal Reserve rate cuts for 2024, backed by a robust and ongoing <a href="https://www.benzinga.com/topic/inflation">disinflationary trend</a> in the U.S. economy. 
Speculators have gone as far as factoring in an initial rate cut as early as March 2024, with whispers of a total of five rate cuts by December 2024.
But which bond ETFs are currently piquing investors&#8217; interest?
<h2 class="wp-block-heading">From &#8216;Cash-Like&#8217; to &#8216;Equity-Like&#8217;</h2>
While the third quarter in 2023 witnessed a notable uptick in inflows into cash-linked bond ETFs, primarily those investing in short-dated Treasury bonds and bills, the latest trends are veering towards more aggressive fixed-income strategies.
Investors are strategically positioning themselves in anticipation of an imminent U-turn in Fed&#8217;s monetary policy stance, eyeing a select group of bond ETFs that have weathered the storm during the recent spate of interest rate hikes.
Their bullish stance on riskier bond ETFs underscores a burgeoning belief that the bond market landscape could undergo a substantial recalibration in the coming months, as they brace for a more accommodating monetary policy environment.
These ETFs encompass a diverse range, including long-term Treasury bonds, emerging-market bonds, and high-yield corporate bonds. 
<h2 class="wp-block-heading">Top 10 Bond ETFs by Fund Inflows in the Past Month</h2>
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>Name</th>
<th>Fund Flows (1-month)</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares Trust &#8211; iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)</td>
<td>$3.69 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Core U.S. Aggregate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGG#NYSE">AGG</a>)</td>
<td>$2.62 bn</td>
</tr>
<tr>
<td>SPDR Series Trust &#8211; SPDR Bloomberg High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JNK#NYSE">JNK</a>)</td>
<td>$1.99 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EMB#NASDAQ">EMB</a>)</td>
<td>$1.89 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 20+ Year Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NASDAQ">TLT</a>)</td>
<td>$1.62 bn</td>
</tr>
<tr>
<td>Vanguard Bond Index Funds &#8211; Vanguard Total Bond Market ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BND#NASDAQ">BND</a>)</td>
<td>$1.56 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares Broad USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USHY#NYSE">USHY</a>)</td>
<td>$1.31 bn</td>
</tr>
<tr>
<td>Vanguard Scottsdale Funds &#8211; Vanguard Long-Term Treasury ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/VGLT#NASDAQ">VGLT</a>)</td>
<td>$665.99 bn</td>
</tr>
<tr>
<td>Vanguard Charlotte Funds &#8211; Vanguard Total International Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BNDX#NASDAQ">BNDX</a>)</td>
<td>$641.06 bn</td>
</tr>
<tr>
<td>iShares Trust &#8211; iShares 5-10 Year Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGIB#NYSE">IGIB</a>)</td>
<td>$216.67 bn</td>
</tr>
</tbody>
</table>
</figure>
Read Now: <a href="https://www.benzinga.com/etfs/specialty-etfs/23/12/36075348/golds-record-high-why-havent-gold-miners-followed-suit">Gold&#8217;s Record High: Why Haven&#8217;t Gold Miners Followed Suit?</a>
Photo: Shutterstock

Emerging Markets

New ETFs

Emerging Market ETFs

Treasuries

Federal Reserve

BNDX

iShares JPMorgan USD Emerging Markets Bond Fund

IGIB

VGLT

Investors Pour Billions To Aggressive Bond ETFs, Banking On Multiple Fed Rate Cuts in 2024

We performed a screening of large-cap ETFs, defined as having Assets Under Management (AUM) above $10 billion &#8211; to determine what funds had the largest positive and negative returns on the week, according to data from <a href="http://etfdb.com">etfdb.com</a>. Only non-leveraged funds were considered.
<h2 class="wp-block-heading">Winners</h2>
SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>)
SPY added $502.21 million in net assets over the trailing week.
Launched in January 1993, SPY was the very first exchange-traded fund listed in the US. The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&amp;P 500 Index, a diversified large-cap U.S. index that holds companies across all eleven GICS sectors.
SPY has $401.56 billion in AUM and an expense ratio of 0.09%. The fund has holdings in 1000 companies, with the 10 largest comprising 39.34% of the fund.
The fund's largest holdings are Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) and Microsoft Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) making up 7.19% and 6.51% of the fund, respectively.
SPY lost $2.62 billion in net assets YTD.
SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>)
BIL was up $490.03 million in AUM on the week.
The SPDR Bloomberg 1-3 Month T-Bill ETF provides exposure to the ultrashort bond market.
The fund has $33.77 billion in AUM and an expense ratio of 0.14%.
YTD, BIL is up $7.65 billion in AUM.
<h2 class="wp-block-heading">Losers</h2>
iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)
HYG lost $1.01 billion in net assets over the trailing week.
The iShares iBoxx $ High Yield Corporate Bond ETF offers exposure to a large swath of the dollar-denominated high-yield corporate bond market.
HYG has $12.94 billion in AUM and an expense ratio of 0.49%.
HYG has lost $3.67 billion in net assets YTD.
SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>)
GLD lost $871.39 million in net assets over the trailing week.
SPDR Gold Shares provide exposure to gold without the need to personally own bullion. The price will move synchronously with the spot price of gold.
GLD has $51.48 billion in AUM and an expense ratio of 0.40%.&nbsp;
GLD lost $3.76 billion in net assets YTD.

AAPL

MSFT

Despite 3% Increase In Spot Price Of Gold, GLD Loses Close To A Billion In AUM - ETF Winners And Losers: Large-Cap Flows

Goldman Sachs&#8217; U.S. economist, Jan Hatzius dialed down the U.S. recession risk further in a Tuesday note. The latest insights from the investment giant reveal the 12-month U.S. recession probability now stands at a mere 15%, down 5 percentage points <a href="https://www.benzinga.com/topic/recession">from their previous estimate.</a>
Goldman Sachs&#8217; unwavering optimism in the U.S. economy&#8217;s resilience has been a talking point on Wall Street over the past year. While others have been cautious, if not bearish, Goldman Sachs has remained firmly in the bull camp. The contrast between Goldman Sachs&#8217; 15% U.S. recession probability and the Bloomberg consensus, which indicates a 60% likelihood of recession, is now striking.
<h2 class="wp-block-heading">The US Economy&#8217;s Wildcard: Strong Fundamentals</h2>
Goldman Sachs points to several factors supporting their rosy outlook. They anticipate a resurgence in household real disposable income by 2024, driven by robust job growth and increasing real wages. 
Furthermore, Hatzius stated that he strongly disagrees with the assumption that an increasing and prolonged drag from high interest rates will force the economy into recession.
Despite a slight uptick in unemployment to 3.8% in August, Goldman Sachs remains unfazed. They attribute this rise to an increase in labor force participation and emphasize that key employment indicators remain strong.
Goldman Sachs anticipates the Federal Reserve to take a measured approach. On the one hand, they think that they are done with rate hikes. On the other, they acknowledge that swift interest rate cuts are unlikely unless economic conditions worsen significantly. The bank projects only a gradual rate cut cycle starting in Q2 2024. 
<h2 class="wp-block-heading">Quandary For Investors</h2>
In the wake of Goldman Sachs&#8217; positive stance on the economy, investors are left pondering their investment strategies. 
The equity and credit strategists at the investment bank suggest that the era of strong stock market gains may have peaked.
&#8220;Equity markets have lost momentum in the last month despite the positive economic news.&#8221;
Analysts at Goldman Sachs believe that both investment-grade (IG) and high-yield (HY) bonds will offer excess returns in the upcoming period. 
U.S. IG bonds are tracked by the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQD#NYSE">LQD</a>), while HY bonds are tracked by iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>). 
Read now: <a href="https://www.benzinga.com/markets/equities/23/09/34239445/oil-markets-roar-as-saudi-arabia-russia-extend-production-cuts-3-oil-stocks-with-huge-upside-pot">Oil Markets Roar As Saudi Arabia, Russia Extend Production Cuts: 3 Oil Stocks With Huge Upside Potential</a>
Photo: Shutterstock.

Economics

Analyst Ratings

Why Goldman Sachs Is Increasingly Confident In Dodging Recession, Contrary To Wall Street Consensus

With escalating interest rates and inflationary pressures, the resiliency of bond investments is being put to the test. Investors find themselves watching helplessly as bond prices undergoe a relentless downward spiral, battered by the unrelenting blows <a href="https://www.benzinga.com/money/what-is-a-bond">of surging borrowing costs.</a>
The tumultuous events of 2022 bear witness to this challenge, as the global bond market endured one of its most turbulent years on record. Hopes were high for a turnaround at the onset of 2023, yet reality proved otherwise. The bond market&#8217;s sell-off persisted with Treasury yields soaring to multi-decade highs. 
The 10-year Treasury yield briefly hit 4.33% yield this week, surging to levels last seen in October 2022, and in 2007, while the duration-sensitive 30-year yield hit 4.42%, the highest since the summer of 2011. 
<h2 class="wp-block-heading">Chart: US Treasury Yields Soared In August</h2>
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="845" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/18123539/US10Y_2023-08-18_18-35-24_e8c31-1024x845.png" alt="" class="wp-image-90336" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/18123539/US10Y_2023-08-18_18-35-24_e8c31-1024x845.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/18123539/US10Y_2023-08-18_18-35-24_e8c31-300x248.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/18123539/US10Y_2023-08-18_18-35-24_e8c31-768x634.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/08/18123539/US10Y_2023-08-18_18-35-24_e8c31.png 1309w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
These yields acted as a gravitational force, exerting influence over the broader bond market. As the world&#8217;s preeminent risk-free rate witnesses a surge, a chain reaction is set in motion, resulting in a universal uptick in bond yields that spares no issuer.
However, as with every trade-off, there&#8217;s a catch. Witnessing bond markets yielding close to or surpassing the 6% annual mark – not far from the Dow Jones Index&#8216;s 6.6% annualized return over the past three decades – is sparking the interest of even those who once regarded bonds as a sacrificial lamb to the inflationary onslaught.
Indeed, while the Federal Reserve remains steadfast in its stance against short-term rate reductions, a downward trend in inflation has also taken shape over the past year. This, in turn, has given rise to positive &#8220;real rates&#8221; in the bond market – a configuration largely foreign to an era defined by ultra-accommodative monetary policies and rates that hovered perilously close to zero.
Read now: <a href="https://www.benzinga.com/money/how-to-buy-treasury-bonds">How to Buy Treasury Bonds</a>
<h2 class="wp-block-heading">What Does The Yield To Maturity Mean For A Bond ETF?</h2>
In the universe of bond investing, the concept of yield to maturity (YTM) reigns supreme, representing the potential annualized return an investor may glean from holding a bond until its maturity date.
However, when applied to the intricate world of exchange-traded funds (ETFs) housing an array of bonds, caution must be exercised. While the YTM offers a glimpse into the potential return from holding an ETF until its underlying bonds reach maturity, the reality rarely involves such a straightforward definition, since bond ETFs do not commonly hold securities until maturity. 
One should note that the YTM assumes reinvestment of coupon payments at the same yield, an assumption not always perfectly aligned with real-world scenarios.
Nonetheless, despite its intricacies, the YTM remains a valuable benchmark for assessing the comparative potential of various bond ETFs, offering investors an informative lens through which to evaluate potential returns.
<h2 class="wp-block-heading">5 Bond ETFs Delivering Over 6% Yield To Maturity</h2>
<ol>
<li>iShares BBB Rated Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LQDB#NYSE">LQDB</a>)</li>
</ol>
Attractive yields are not exclusive to the realm of speculative securities. Enter American BBB-rated corporate bonds – the last frontier before crossing into high-yield territory. With the iShares BBB Rated Corporate Bond ETF, investors gain access to an index comprising BBB (or equivalent) fixed-rate U.S. dollar-denominated bonds issued by corporate entities, both domestic and international.
<ul>
<li>Average Yield to Maturity: 5.94% as of Aug. 17, 2023</li>
<li>Year-to-date Return: 1.43%</li>
<li>Expense Ratio: 0.15%</li>
</ul>
2. iShares 10+ Year Investment Grade Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGLB#NYSE">IGLB</a>)
Venturing deeper into investment-grade territory, extending maturity to over a decade unveils yields of 6%. The iShares 10+ Year Investment Grade Corporate Bond ETF provides exposure to U.S. dollar-denominated investment-grade corporate bonds with maturities surpassing 10 years.
<ul>
<li>Average Yield to Maturity: 5.97% as of Aug. 17, 2023</li>
<li>Year-to-date Return: 0.17%</li>
<li>Expense Ratio: 0.04%</li>
</ul>
3. iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HYG#NYSE">HYG</a>)
Descending further into the hierarchy, the &#8220;high yield&#8221; realm beckons, offering higher potential returns in tandem with elevated risk – adhering to investment&#8217;s age-old adage. The iShares iBoxx $ High Yield Corporate Bond ETF tracks an index comprising U.S. dollar-denominated high-yield corporate bonds.
<ul>
<li>Average Yield to Maturity: 8.53% as of Aug. 17, 2023</li>
<li>Year-to-date Return: 4.75%</li>
<li>Expense Ratio: 0.49%</li>
</ul>
4. BondBloxx CCC Rated USD High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XCCC#NYSE">XCCC</a>)
Venturing closer to the brink of default, the realms of CCC, CC, and C ratings herald the epitome of high-yield. Reflecting the poor credit quality of these enterprises, yields surge even higher. 
The BondBloxx CCC Rated USD High Yield Corporate Bond ETF tracks bonds rated CCC1 through CCC3, forming an average based on major rating agencies. With risk at the forefront, issuer exposure is capped at 2% of the portfolio&#8217;s weight.
<ul>
<li>Average Yield to Maturity: 13.02% as of Aug. 17, 2023</li>
<li>Year-to-date Return: 2.98%</li>
<li>Expense Ratio: 0.40%</li>
</ul>
5. iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EMB#NYSE">EMB</a>)
Shifting our gaze to the exotic world of emerging markets, the realm of dollar-denominated bonds currently unveils attractive yields. 
The iShares J.P. Morgan USD Emerging Markets Bond ETF grants access to U.S. dollar-denominated bonds from emerging markets, presenting a yield exceeding 7.5% as of this article&#8217;s publication.
<ul>
<li>Average Yield to Maturity: 7.59% as of Aug. 17, 2023</li>
<li>Year-to-date Return: 2.34%</li>
<li>Expense Ratio: 0.39%</li>
</ul>
Read also: <a href="https://www.benzinga.com/money/how-to-buy-corporate-bonds">How to Buy Corporate Bonds</a>
Photo: Shutterstock

IGLB

LQDB

BondBloxx ETF Trust BondBloxx CCC-Rated USD High Yield Corporate Bond ETF

XCCC

The Magic 6%: These 5 Bond ETFs Now Offer Stock-Like Returns As Treasury Yields Jump To Multi-Decade Highs

The debt limit talk&nbsp;has&nbsp;reached its&nbsp;last and most important stage&nbsp;with just five days, or barely more than 100 hours, until the U.S. Treasury may&nbsp;<a href="https://www.benzinga.com/topic/debt-ceiling" target="_blank">run&nbsp;out of money.&nbsp;</a>
Both the stock and the bond market&nbsp;are likely to react strongly depending whether a deal is reached or not, or if any other surprises arise at the end. Treasury yields could also see sharp swings on sensitive headlines in the coming hours.&nbsp;
Negotiators for the White House and the Republican Party&nbsp;are scrambling to avert a historic and probably catastrophic U.S. default, as Treasury Secretary Janet Yellen predicted &quot;early June&quot; as the date when the government&#39;s cash won&#39;t be able to meet all payments due.&nbsp;
Read Also:&nbsp;<a href="https://www.benzinga.com/government/23/05/32593845/congressional-debt-ceiling-talks-gain-momentum-critical-deal-in-sight-because-default-is-unacceptabl" target="_blank">Congressional Debt Ceiling Talks Gain Momentum, Critical Deal In Sight &#39;Because Default Is Unacceptable&#39;: Report</a>
The odds of an agreement being revealed late on Friday, May 26&nbsp;or on Saturday, May 27, with a House vote the following week are the highest, according to Goldman Sachs&nbsp;Chief Economist&nbsp;Jan Hatzius.&nbsp;
Goldman Sachs&#39; baseline forecasts see the U.S. Treasury reaching its minimal cash level on June 6, with funds totally depleted by June 9 if the debt limit is not raised.&nbsp;
Benzinga highlighted&nbsp;how these&nbsp;five bond ETFs could react&nbsp;to debt limit announcements in the coming hours.&nbsp;
1) IShares 0-3 Month Treasury Bond ETF (ARCA: SGOV)
The fund managed by Blackrock Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/blk#NYSE">BLK</a>) invests in Treasury bills with maturities up to three months. These are the shortest-dated U.S. Treasury securities which are particularly sensitive to the June deadline.&nbsp;
In the previous month, yields on one-month Treasury notes due after June have risen from 4% to 5.7%, indicating market worry regarding the debt limit resolution. Short-term T-bill rates will fall if the debt ceiling is lifted, raising the&nbsp;ETF&#39;s&nbsp;value.
2) IShares 1-3 Year Treasury Bond ETF (ARCA: SHY)
The IShares 1-3 Year Treasury Bond ETF is particularly sensitive to market Fed rate expectations, which are substantially reflected in two-year Treasury yield fluctuations.
Short-term Treasury rates may fluctuate whether the debt ceiling is raised or not. A compromise will keep the Fed focused on recent inflation and labor market data, <a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32593305/feds-favorite-inflation-gauge-rises-more-than-expected-in-april-market-expectatio" target="_blank">which have been hotter than expected</a>, supporting market predictions for a June rate hike. ETFs will decrease if short-term rates rise, but yield-seeking investors may find an attractive entry point here&nbsp;if they think the Fed will soon end its tightening cycle.
Since a U.S. default would cause market disruptions and employment losses, the Fed would likely opt to stop raising interest rates in a no-deal situation.&nbsp;In this case,&nbsp;the value of the&nbsp;IShares 1-3 Year Treasury Bond ETF&nbsp;will rise.&nbsp;
3) IShares 20+ Year Treasury Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>)
The IShares 1-3 Year Treasury Bond ETF is sensitive to long-term Treasury yield changes, which are heavily influenced by growth and inflation forecasts.
A deal is likely to increase in duration-exposed&nbsp;Treasury yields, to varying degrees depending on the amount of the expenditure reductions. Lower-than-expected budget cutbacks&nbsp;will provide a stronger push&nbsp;to yields&nbsp;than a debt limit agreement indicating substantial expenditure cuts.
4)&nbsp;iShares iBoxx $ High Yield Corporate Bond ETF (ARCA: HYG)
HYG invests in high-yield corporate bonds denominated in U.S. dollars, which are by definition a risky asset that is closely tied to market sentiment.
If the debt limit resolution is seen positively by the market, high-yield corporates will profit from the wider risk-on atmosphere&nbsp;and the ETF&#39;s value is projected to rise.
A no-deal scenario or an agreement with significant budget cutbacks, on the other hand, may cause weakness in high-yield corporates, prompting investors to flee&nbsp;riskier assets and flock to&nbsp;safer alternatives.
5)&nbsp;iShares J.P. Morgan USD Emerging Market (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/emb#NASDAQ">EMB</a>)
The fund invests in developing market dollar-denominated fixed-income instruments and may experience significant volatility depending on whether or not an agreement on the debt limit is reached.&nbsp;
Given that developing market bonds are a risky asset class, they tend to be linked to U.S. high-yield corporate bonds, so EMB could experience a similar impact&nbsp;as HYG. A broader risk-off mood could spark losses in EM bonds, while this market is likely to benefit&nbsp;from an increasing risk appetite.&nbsp;
Chart: Performance of SHY, TLT, EMB and HYG Year-To-Date
<img alt="" src="https://www.benzinga.com/files/u1363475/hyg_2023-05-26_14-47-01_5fc15.png" style="height:500px; width:100%" />
<ul>
</ul>
Photo: Shutterstock

Government

SGOV

iShares Trust Barclays 1-3 Year Treasury Bond Fund

5 Bond ETFs To Watch As Debt Ceiling Talks Enter The Final Hours To Avoid A US Default

Both the stock market and the bond market will be significantly affected by the upcoming <a href="https://www.benzinga.com/general/education/22/04/25718901/what-is-the-fomc" target="_blank">Federal Reserve&#39;s interest rate decision.&nbsp;</a>
The market is now nearly fully pricing in a 25-basis-point raise to 5%-5.25%, according to the CME Group Fedwatch tool, but what the Fed hints to do&nbsp;beyond May is what keeps investors on alert.&nbsp;
The market&#39;s attention will mostly be directed at determining if this is the Federal Reserve&#39;s last&nbsp;rate hike in the current cycle,&nbsp;or whether Fed Chair Jerome Powell will leave the door open for an additional increase in June.&nbsp; 
The second hypothesis would cause heavy&nbsp;market fluctuations, since this scenario is not&nbsp;discounted by&nbsp;investors, who expect the Fed to conclude its rate increases in May.&nbsp;
How U.S. Treasuries Could React To The Fed&#39;s Meeting
The yield on the two-year Treasury note is currently at 4%, while that on the 10-year benchmark is at 3.46% as the May FOMC meeting approaches.
If the Fed suggests that rate hikes have ended and adopts a rather gloomy perspective on the economy&nbsp;and the labor market, U.S. Treasury yields are projected to fall further, driving up the price of U.S. government bonds.
A hawkish Fed, with Chair Powell rejecting current market expectations of a pause in June and the start of rate cuts later this year, would likely be detrimental to the Treasury market, as rates would rise to reflect the Fed&#39;s higher-for-longer attitude on interest rates.
5 Bond ETFs to Keep an Eye On Ahead of the May FOMC Meeting
&bull; iShares 1-3 Year Treasury Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/shy#NASDAQ">SHY</a>)
The iShares 1-3 Year Treasury Bond ETF&nbsp;is an exchange-traded fund managed by BlackRock, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/blk#NYSE">BLK</a>) that invests in U.S. Treasury securities with maturities higher than or equal to one year but less than three years.
As a result, SHY is sensitive to short-term Fed interest rate speculation, although its volatility is normally limited due to its short duration.
When an unexpected negative shock strikes the market and leads the Fed to become more dovish, it is one of the assets that tend to increase because investors regard it as a safe haven.
SHY has risen 1% thus far in 2023&nbsp;and has recorded outflows&nbsp;of $352 million over the last&nbsp;month.
&bull;&nbsp;iShares 20+ Year Treasury Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/tlt#NASDAQ">TLT</a>)
The iShares 20+ Year Treasury Bond ETF&nbsp;is an exchange-traded fund managed by BlackRock that invests in U.S. Treasury securities with maturities higher than 20 years.
As a result of its high&nbsp;duration, TLT is very sensitive to medium-term Fed interest rate expectations and often shows heightened volatility to interest-rate shifts.
When recessionary shocks hit the economy and induce a decrease in inflation expectations, this asset appreciates significantly.
TLT has risen 4.1% year to date and has attracted inflows of $1.8&nbsp;billion over the last month.&nbsp;
Read next: <a href="https://www.benzinga.com/money/how-to-buy-treasury-bonds" target="_blank">How to Buy Treasury Bonds</a>
&bull;&nbsp;iShares iBoxx $ Investment Grade Corporate ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lqd#NYSE">LQD</a>)
The iShares iBoxx $ Investment Grade Corporate Bond ETF&nbsp;is an exchange-traded fund managed by BlackRock that invests in investment-grade corporate bonds with at least three&nbsp;years to maturity.
Investors sometimes flee to the fixed rates of safer corporate bonds during moments of risk-off in the stock markets
LQD has risen 2.7% year to date and has attracted outflows of $720 million over the last month.&nbsp;
&bull;&nbsp;iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hyg#NYSE">HYG</a>)
The iShares iBoxx $ High Yield Corporate Bond ETF&nbsp;is an exchange-traded fund managed by BlackRock that invests in high-yield corporate bonds with maturities of at least one year and less than 15 years.
Due to its exposure to junk corporate bonds, HYG is a more volatile investment that tends to follow&nbsp;the sentiment on&nbsp;global stock markets.
Periods of abundant liquidity and limited&nbsp;corporate defaults are a&nbsp;perfect environment&nbsp;for HYG to grow, yet&nbsp;when interest rates rise and there is anxiety about widespread defaults in the corporate sector, HYG declines.
HYG is up 1.1% year to date and attracted inflows of&nbsp;$2.07 billion over the last month.
&bull;&nbsp;iShares J.P. Morgan USD Emerging Market (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/emb#NASDAQ">EMB</a>)
The iShares J.P. Morgan USD Emerging Markets Bond ETF is an exchange-traded fund managed by BlackRock International Limited and BlackRock Fund Advisors that invests in USD-denominated bonds of emerging countries across the globe&nbsp;and seeks to replicate the performance of J.P. Morgan EMBI Global Core Index.
EMB is also a highly volatile bond ETF that is also tightly correlated to HYG given its &quot;risk-on&quot; profile.&nbsp;Therefore, lower Fed interest rates and prospects of abundant liquidity in markets are what send&nbsp;EMB higher. On the other hand, higher U.S. Interest rates and rising Treasury yields represent major headwinds.
EMB has gained 0.4% year to date and has registered outflows of $215 million over the last month.
Now Read:&nbsp;<a href="https://www.benzinga.com/economics/macro-economic-events/23/05/32165610/investors-reduce-2023s-rate-cut-bets-ahead-of-fomc-analysts-now-expect-fed-on-haw">Investors Reduce 2023 Rate Cut Bets Ahead Of FOMC: Analysts Now Expect Fed On Hawkish-Hold Mode For Longer</a>
Some elements of this story were previously reported by Benzinga and it has been updated.

As Key Fed Interest Rate Decision Approaches: Here Are 5 Bond ETFs To Keep An Eye On

High-yield bonds issued by American&nbsp;and European corporations&nbsp;are considered attractive assets since they offer above-average yields&nbsp;at cheap prices, according to Oaktree Capital Management&#39;s most <a href="https://www.benzinga.com/money/how-to-buy-corporate-bonds" target="_blank">recent credit market outlook.</a>
The&nbsp;asset management firm specializing in alternative investment strategies stated that the risk of widespread corporate defaults in 2023 remains low, as&nbsp;issuer fundamentals are rather solid, and near-term maturities are modest following the wave of refinancing in 2020-21.
The high yield market &ndash;&nbsp;which is tracked by the iShares iBoxx $ High Yield Corporate Bond ETF (ARCA: HYG) &ndash;&nbsp;&quot;appears to be better positioned to weather an economic downturn than in the past,&quot; according to Oaktree.&nbsp;
Yields continue to trade&nbsp;considerably above the ten-year average, with over 55% of HY corporates&nbsp;showing&nbsp;yields above 7% at the end of Q1, compared to less than 7% at the start of 2022.&nbsp; 
The global asset manager&nbsp;also cautioned that issuer selection remained critical, since risks are not insignificant in this asset class. Low-rated corporate issuers may struggle to roll over debt now that financial conditions have tightened and &quot;reduced earnings due to inflation may have a negative impact on leverage ratios and result in credit rating downgrades,&quot; Oaktree analysts wrote in the note.
Read also:&nbsp;<a href="https://www.benzinga.com/etfs/sector-etfs/23/04/31919475/etfs-flows-tracker-investors-withdrew-over-2-billion-from-spy-qqq-this-week-other-etfs-that-saw-" target="_blank">ETFs Flows Tracker: Investors Withdrew Over $2 Billion From SPY, QQQ This Week; Other ETFs That Saw Notable Action</a>
What Yields Do High Yield Bonds&nbsp;Offer Today?
<ul>
<li>The broad U.S. high-yield bond market screens an effective yield to maturity of 8.25%, as of Friday, April 21.&nbsp;</li>
<li>BB-rated high-yield corporate bonds in the United States had an effective yield of 6.62%.</li>
</ul>
B-rated high-yield corporate bonds in the United States had an effective yield of 8.58%.
CCC-rated&nbsp;high-yield corporate bonds in the United States had an effective yield of 14.67%.
<img alt="" src="https://www.benzinga.com/files/u1363475/bamlh0a0hym2ey_2023-04-21_16-09-32_dc94e.png" style="height:500px; width:100%" />
How Have U.S.&nbsp;High Yield Bonds Performed in 2023?
<ul>
<li>So far in 2023, high-yield corporate bonds in the United States have produced a total return of 4%.</li>
<li>BB-rated high-yield bonds have delivered&nbsp;a total return of 3.7%, lagging behind.&nbsp;&nbsp;</li>
<li>B-rated high-yield bonds&nbsp;have delivered&nbsp;a total return of 4.2%.&nbsp;</li>
<li>CCC-rated high-yield bonds have outperformed the other buckets with a total return of 5.7% year to date, outperforming the other buckets.&nbsp;</li>
</ul>
<img alt="" src="https://www.benzinga.com/files/u1363475/bamlhyh0a0hym2triv_2023-04-21_16-25-05_4aaff.png" style="height:500px; width:100%" />
Now Read: <a href="https://www.benzinga.com/news/23/04/31923463/big-bucks-at-google-a-look-at-how-much-alphabet-analysts-managers-and-engineers-get-paid">Making Big Bucks At Google: A Look At How Much Alphabet Analysts, Managers And Engineers Get Paid</a>

High-Yield Corporate Bonds Are Attractive Amid Low Default Risk In 2023: Oaktree Capital

The risk appetite of investors remains depressed, not far from the extreme pessimism of 2022 and comparable to the levels of the 2009 Great Financial Crisis, according to the most recent Global Fund Manager Survey (FMS) conducted <a href="https://www.benzinga.com/news/earnings/23/04/31853910/bank-of-america-outshines-projections-q1-16-earnings-beat-fuels-share-price-rally" target="_blank">by Bank of America.</a>
BofA&#39;s overall risk sentiment barometer, which takes into account&nbsp;growth expectations, as well as equities and cash allocations, became increasingly pessimistic in April, reaching the most negative levels thus far in 2023.&nbsp;
Another sign of the defensive&nbsp;stance of global fund managers is the strong&nbsp;underweight in equities relative to bonds, which is at levels not seen since the Great Financial Crisis.
BofA Sees &quot;Pain Trades&quot; If Recession Doesn&#39;t Materialize
&quot;Bear sentiment is still&nbsp;contrarian&nbsp;supportive for&nbsp;risk assets&quot; according to Bank of America chief investment<a href="https://www.benzinga.com/topic/michael-hartnett" target="_blank"> strategist Michael Hartnett</a>. The expert predicted &quot;pain trades&quot; in rising bond yield and a rally in bank equities and REITs (where there is presently a great deal of pessimism)&nbsp;if the consensus expectation for a recession is not soon realized in the second quarter. &quot;If the recession hits in six&nbsp;months rather than six&nbsp;weeks, contrarian trades for April-May based just on FMS positioning&nbsp;include long US dollar,&nbsp;short gold, long banks-short bonds, long HY-short IG bonds, and long real estate-short tech,&quot; he said.&nbsp;
Also Read:&nbsp;<a href="https://www.benzinga.com/general/gaming/23/04/31834626/zuckerberg-splurges-meta-vr-developer-annual-salary-more-than-average-american-worker-makes-in-10-">Zuckerberg Splurges: Meta VR Developer Annual Salary More Than Average American Worker Makes In 10 Years</a>
Key Takeaways From BofA Global FMS
<ul>
<li>The BofA Global FMS polled 249 global institutional professionals in April, including 128 portfolio managers, 66 strategists/economists, 40 chief investment officers, and 15 others.</li>
<li>A net 63% of investors anticipate a worsening economy, up 13 percentage points month-on-month to the gloomiest level since December 2022.&nbsp;</li>
<li>Thirty-five percent of investors believe the Fed will begin an easing cycle in Q1 2024, 28% in Q4 2023, 14% in Q3 2023, and 10% in Q2 2024.</li>
<li>Eighty-nine percent&nbsp;of FMS investors expect above-trend inflation over the next 12 months, down from 92% in March 2023 but still much higher than anything observed since the run-up to the 2008 GFC.</li>
<li>Thirty percent of investors think that &quot;Long Big Tech Stocks,&quot; a segment of the market tracked by the Technology Select Sector SPDR Fund (ARCA: XLK), is&nbsp;the most crowded trade&nbsp;in April 2023.</li>
<li>Half of FMS investors think IG bonds, which are tracked by the iShares iBoxx $ Investment Grade Corporate Bond ETF (ARCA: LQD), will outperform HY bonds, which are tracked by the iShares iBoxx $ High Yield Corporate Bond ETF (ARCA: HYG),&nbsp;over the next year, the highest level on record.</li>
<li>A bank credit crunch and&nbsp;global recession were considered the highest tail risk&nbsp;in April, according to more than a third of investors.</li>
<li id="P04671FEE">The second most feared risk was high inflation keeping central banks hawkish, just marginally lower than the credit crunch.</li>
<li>Investors are the most bearish&nbsp;on&nbsp;real estate since July 2009.&nbsp;Half of FMS&nbsp;investors&nbsp;think that US/EU commercial real estate&nbsp;(CRE)&nbsp;is the most likely source of a credit event.</li>
</ul>
Read next: <a href="https://www.benzinga.com/news/23/04/31881783/morgan-stanleys-jim-caron-says-credit-crunch-to-unfold-slowly-over-time-not-a-sudden-shock-event" target="_blank">Morgan Stanley&#39;s Jim Caron Says Credit Crunch To Unfold Slowly Over Time: &#39;Not A Sudden Shock Event&#39;</a>

Long Ideas

Short Ideas

Econ #s

BofA Fund Manager Survey: Investors Underweight In Stocks Reaches 2009 Crisis Levels

Bond market volatility has been through the roof recently due to increased banking sector stress and investor&nbsp;uncertainty&nbsp;over <a href="https://www.benzinga.com/topic/interest-rates">the Fed&nbsp;rate path</a>.
The ICE BofA&nbsp;Merrill Lynch U.S. Bond Market Option Volatility Estimate (INDEXNYSEGIS: MOVE), commonly known as the &quot;VIX&quot; for bonds and a widely used measure of the implied rate&nbsp;volatility in the U.S. Treasury market, has spiked this week to levels not seen since December 2008, when the financial markets were at the height of the Great Recession after the collapse of Lehman Brothers.
<img alt="" src="https://www.benzinga.com/files/u1363475/move_2023-03-16_19-46-03_a3484.png" style="height:395px; width:760px" />MOVE Index, Chart: TradingView
The sharp increase in the MOVE index reflects the extraordinary volatility seen in the U.S. Treasuries market over the last week.&nbsp;
Daily swings in two-year Treasury yields have gotten out of hand. The yield drop of more than 50 basis points that occurred on March 13, following the failure of Silicon Valley Bank,&nbsp;was the greatest since October 1987. Nonetheless, there were days when yields climbed by more than 20 basis points, such as on March 16, putting them comfortably at the top of the range over the previous two decades.
The graph below, which depicts the two-year Treasury yield&#39;s daily fluctuations in basis points, mimics a seismograph during an earthquake.
<img alt="" src="https://www.benzinga.com/files/u1363475/koyfin_20230316_075154743.png" style="height:570px; width:760px" />U.S. two-year Treasury yields daily change (bp) &ndash; Chart: Koyfin
Markets Lean Toward 25bps Hike: Just a&nbsp;week ago, which seems so long ago considering what has happened since then, markets were leaning toward a 50-basis-point&nbsp;hike in March, as Fed Chairman Jerome Powell sounded rather hawkish in his Congressional testimony.&nbsp;
Over the weekend, the failure of Silicon Valley Bank and Signature Bank fundamentally altered the game, and rate expectations practically collapsed early this week, with some experts even predicting a Fed cut in March.
Bets on a Fed 25bp rate hike in March have risen after <a href="https://www.benzinga.com/economics/macro-economic-events/23/03/31380721/european-central-bank-hikes-rates-by-50-basis-points-says-banking-sector-resilien">the ECB&#39;s 50bp&nbsp;hike&nbsp;on Thursday</a>, and the CME FedWatch Tool now gives this scenario an 80% probability.
Yet investors are already seeing&nbsp;the end of the tunnel drawing nearer.
The terminal rate is now priced at 4.95% for May 2023, and traders expect Fed funds rates to drop to 4.2% by December 2023, implying three 25-basis-point&nbsp; rate cuts during the second half of 2023.
High Yield Corporate Bonds Screen Attractive Yields:&nbsp;On the high yield spectrum, U.S. corporate bonds continue to provide excellent yields, particularly when compared to their recent history.
According to latest data&nbsp;from the Federal Reserve Bank of St. Louis, the ICE BofA US High Yield Index Effective Yield, which tracks the median yield of U..S. dollar denominated, below investment grade-rated corporate debt publicly issued in the US domestic market, was 8.88%. This value is more than a standard deviation higher than its 10-year average.
The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG) is mostly flat so far this year, but it is still 10% lower than it was a year ago.
Read more:&nbsp;<a href="https://www.benzinga.com/yield-investments" rel="noopener noreferrer" target="_blank">Best High Yield Investments to Earn</a>
<img alt="" src="https://www.benzinga.com/files/u1363475/koyfin_20230316_081142968.png" style="height:760px; width:760px" />Chart: Koyfin

SIVB

Bond Market Volatility Echoes Great Recession: Will Central Banks Give Up On Interest Rate Hikes?

The CBOE Volatility Index rose sharply, nearly topping the 30s level <a href="https://www.benzinga.com/news/23/03/31359536/top-4-industrials-stocks-that-may-plunge"> on Wednesday. </a>
On CNBC&rsquo;s &quot;<a href="https://www.cnbc.com/video/2023/03/15/options-action-huge-bet-on-volatility.html">Options Action</a>,&quot; Brian Stutland of Equity Armor Investments said iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hyg#NYSE">HYG</a>) traded at 2x average daily volume on Wednesday.
Don&rsquo;t forget to check out our <a href="https://www.benzinga.com/premarket/"> premarket coverage here</a>.
There was a seller of 62,000 of the April 72-puts at an average price of $0.95 per contract, Stutland mentioned.
The trader sees a decline in volatility and projects HYG to remain above the 72 level through April expiration.
Price Action: CBOE Volatility Index jumped 10.2% to close at $26.14 on Wednesday, while HYG Corporate Bond ETF fell 0.33% to $73.33 during the session.
What is CBOE Volatility Index?
The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market&#39;s expectation of volatility based on S&amp;P 500 index call and put options.
Check This Out: <a href="https://www.benzinga.com/news/23/03/31359757/insiders-selling-micron-keycorp-and-2-other-stocks"> Insiders Selling Micron, KeyCorp And 2 Other Stocks </a>
Photo via Shutterstock.&nbsp;

Options

Media

Options Traders Bet On HYG Corporate Bond ETF Remaining Above $72 Through April Expiration

iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hyg#NYSE">HYG</a>) is the ETF that tracks <a href="https://www.benzinga.com/trading-ideas/long-ideas/23/02/31068706/39m-bet-on-this-biotechnology-stock-check-out-these-3-stocks-insiders-are-buying"> high-yield bonds. </a>
On CNBC&rsquo;s &quot;<a href="https://www.cnbc.com/video/2023/02/27/options-action-hyg-nears-pandemic-lows.html">Options Action</a>,&quot; Mike Khouw of Optimize Advisors said puts were outpacing calls by over 2-to-1&nbsp;on HYG Corporate Bond ETF on Monday.
Don&rsquo;t forget to check out our <a href="https://www.benzinga.com/premarket/"> premarket coverage here </a> 
There was a buyer of 15,000 of the April 72/69-put spreads at an average price of $0.41 per contract, Khouw mentioned.
The trader expects HYG Corporate Bond ETF retesting pandemic lows by April expiration.
Price Action: HYG Corporate Bond ETF gained 0.67% to close at $74.67 on Monday.
Check This Out: <a href="https://www.benzinga.com/news/23/02/31068692/wall-streets-most-accurate-analysts-say-hold-these-3-tech-stocks-delivering-high-dividend-yields"> Wall Street&#39;s Most Accurate Analysts Say Hold These 3 Tech Stocks Delivering High-Dividend Yields </a>

Options Traders Betting On This High-Yield Corporate Bond ETF To Retest Pandemic Lows

Macro trading is an investment strategy that takes into account both domestic and global macroeconomic trends.
Most global macro trading ideas&nbsp;are in essence so simple that even the most <a href="https://www.benzinga.com/money/how-to-trade-stocks">inexperienced investor could grasp them</a>. The difficulty comes not from the trades themselves, but from the timing of execution.
What Happened: Macro trading emerged as the prominent strategy among hedge funds in the previous year, according <a href="https://archive.is/hhhYP">to</a> Bloomberg, with some firms achieving significant returns through investments in macroeconomic events.
These returns were reported to be in the range of <a href="https://www.benzinga.com/short-sellers/23/01/30377831/this-hedge-fund-posted-gains-of-193-in-2022-how-did-that-happen-in-a-bear-market">double and triple digits</a> in 2022. Conversely, other firms that had a focus on technology stocks experienced substantial losses in the volatile market conditions.
Why It Matters: Rokos Capital, managed by Chris Rokos, traded macro in 2022, gaining 51% on the year. Rokos&#39; former employer, Brevan Howard Asset Management, gained 20.14% trading macro.
What stocks and indices did Rokos Capital have in its portfolio?
By weight, according to the fund&rsquo;s most recent <a href="https://13f.info/13f/000166633522000011-rokos-capital-management-llp-q3-2022">13F-HR</a> at the end of the third quarter, it held:
<table border="1" cellpadding="1" cellspacing="1" style="width:500px">
<tbody>
<tr>
<td>
Issuer Name
</td>
<td>
Ticker
</td>
<td>
% of Portfolio
</td>
<td>
2022 Performance&nbsp;
</td>
</tr>
<tr>
<td>
Microsoft Corp
</td>
<td>
MSFT
</td>
<td>
4.7%
</td>
<td>
-28.69%
</td>
</tr>
<tr>
<td>
Energy Select Sector SPDR Fund
</td>
<td>
XLE
</td>
<td>
4%
</td>
<td>
+57.60%
</td>
</tr>
<tr>
<td>
Southwestern Energy Company
</td>
<td>
SWN
</td>
<td>
3.6%
</td>
<td>
+25.54%
</td>
</tr>
<tr>
<td>
Financial Select Sector SPDR Fund
</td>
<td>
XLF
</td>
<td>
2.6%
</td>
<td>
-12.2%
</td>
</tr>
<tr>
<td>
EQT Corp
</td>
<td>
EQT
</td>
<td>
2.4%
</td>
<td>
+55.11%
</td>
</tr>
<tr>
<td>
Bank of America Corp
</td>
<td>
BAC
</td>
<td>
2.4%
</td>
<td>
-25.56%
</td>
</tr>
<tr>
<td>
Nvidia Corp
</td>
<td>
NVDA
</td>
<td>
1.2%
</td>
<td>
-50.31%
</td>
</tr>
<tr>
<td>
Apple Inc
</td>
<td>
AAPL
</td>
<td>
1.1%
</td>
<td>
-26.83%
</td>
</tr>
<tr>
<td>
iBoxx $ High Yield&nbsp;
</td>
<td>
HYG
</td>
<td>
1.1%
</td>
<td>
-15.38%
</td>
</tr>
<tr>
<td>
Salesforce Inc
</td>
<td>
CRM
</td>
<td>
0.9%
</td>
<td>
-47.83%
</td>
</tr>
</tbody>
</table>
While the performance of the individual stocks in the above list has been mixed, Rokos Capital has hedged its positions with options. Here&rsquo;s how much it held in 2022.
<table border="1" cellpadding="1" cellspacing="1" style="width:500px">
<tbody>
<tr>
<td>
Issuer Name
</td>
<td>
Ticker
</td>
<td>
% of Portfolio
</td>
<td>
Call/Put
</td>
</tr>
<tr>
<td>
Financial Select Sector SPDR Fund
</td>
<td>
XLF
</td>
<td>
23%
</td>
<td>
Call
</td>
</tr>
<tr>
<td>
Invesco QQQ Trust Series 1
</td>
<td>
QQQ
</td>
<td>
13%
</td>
<td>
Put
</td>
</tr>
<tr>
<td>
Financial Select Sector SPDR Fund
</td>
<td>
XLF
</td>
<td>
3.7%
</td>
<td>
Put
</td>
</tr>
<tr>
<td>
Pinterest Inc
</td>
<td>
PINS
</td>
<td>
2.8%
</td>
<td>
Call
</td>
</tr>
<tr>
<td>
iShares China Large-Cap ETF
</td>
<td>
FXI
</td>
<td>
2.3%
</td>
<td>
Call
</td>
</tr>
<tr>
<td>
EQT Corp
</td>
<td>
EQT
</td>
<td>
2.1%
</td>
<td>
Put
</td>
</tr>
<tr>
<td>
Taiwan Semiconductor Mfg.&nbsp;
</td>
<td>
TSM
</td>
<td>
2%
</td>
<td>
Put
</td>
</tr>
<tr>
<td>
Eli Lilly And Co
</td>
<td>
LLY
</td>
<td>
1.8%
</td>
<td>
Put
</td>
</tr>
<tr>
<td>
Salesforce Inc
</td>
<td>
CRM
</td>
<td>
1.5%
</td>
<td>
Call
</td>
</tr>
<tr>
<td>
AbbVie Inc
</td>
<td>
ABBV
</td>
<td>
1.4%
</td>
<td>
Put
</td>
</tr>
</tbody>
</table>
Read Next:&nbsp;<a href="https://www.benzinga.com/general/entertainment/23/01/30376793/2022s-worst-performing-hedge-fund-saw-negative-56-returns-has-these-stocks-to-blame">2022&#39;s Worst Performing Hedge Fund Saw Negative 56% Returns, Has These Stocks To Blame</a>
Photo:&nbsp;<a href="https://www.shutterstock.com/g/Golden+Dayz">Golden Dayz</a>&nbsp;via Shutterstock

Hedge Funds

Commodities

General

ABBV

NVDA

PINS

Top-Performing Hedge Fund In 2022 Has This Strategy To Thank: How Much Did It Make Last Year?

Investors often short stocks to hedge positions against long positions or as a way to bet against a particular company. Benzinga provides a look at the <a href="https://www.benzinga.com/short-interest/most-shorted">most shorted stocks here.</a>
Exchange traded funds offer investors a way to get exposure to the overall market, certain sectors or countries by providing an investment of a basket of stocks.
A new report from S3 Partners and managing director of predictive analytics Ihor Dusaniwsky shows the most shorted ETFs, which ETFs have the highest short interest and which ETFs saw the biggest inflows of new shorts in the last 30 days.
Top Shorted ETFs: The report dives into the most shorted ETFs, and many of them are familiar names that cover the overall broader market. Other names are related to certain sectors.
Overall, there is $214.3 billion in short interest in 3,350 ETFs tracked by S3, down from $215 billion 30 days ago.
ETFs have an average of 16.4% short interest and cost to borrow of $1.02%. This compares to average short interest of 4.86% for U.S. stocks and a cost to borrow of 0.65%.
1. SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>): $53.7 billion short, 14.28% short float, 0.3% cost to borrow
2. Invesco QQQ Trust (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>): $20.2 billion short, 12.47% short float, 0.3% cost to borrow
3. iShares Russell 2000 (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/iwm#NYSE">IWM</a>): $18.4 billion short, 33.22% short float, 0.94% cost to borrow
4. iShares iBoxx High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hyg#NYSE">HYG</a>): $6.8 billion short, 38.8% short float, 2.82% cost to borrow
5. iShares MSCI Emerging Markets (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/em#NYSE">EM</a>): $5.1 billion short, 22.96% short float, 0.3% cost to borrow
6. SPDR Energy Select Sector ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xle#NYSE">XLE</a>): $4.4 billion short, 9.82% short float, 0.3% cost to borrow
7. iShares MSCI EAFE ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/efa#NYSE">EFA</a>): $3.7 billion short, 8.22% short float, 0.3% cost to borrow
8. iShares iBoxx Investment Grade Corporate Bond (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lqd#NYSE">LQD</a>): $3.6 billion short, 8.88% short float, 0.3% cost to borrow
9. SPDR Financial Select Sector (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlf#NYSE">XLF</a>): $2.9 billion short, 8.85% short float, 0.3% cost to borrow
10. SPDR S&amp;P Biotech (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xbi#NYSE">XBI</a>): $2.8 billion short, 34.86% short float, 0.94% cost to borrow
Related Link: <a href="https://www.benzinga.com/news/22/11/29805045/paxmedica-getty-images-and-3-short-squeeze-candidates-that-could-soar-this-week">Paxmedica, Getty Images And 3 Short Squeeze Candidates That Could Soar This Week&nbsp;</a>
ETFs With Short Interest&nbsp;Rising: The report from S3 shows that investors are increasing their short bets in the ETF space in sectors like semiconductors and fixed income. Investors are also increasing short positions in ETFs covering specific countries.
The 5 ETFs that saw the biggest increase in short positions in the last 30 days are:
1. iShares iBoxx High Yield Corporate Bond ETF: $994.8 million added
2. VanEck Semiconductor ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/smh#NASDAQ">SMH</a>): $462&nbsp;million added
3. iShares Core MSCI Total International Stock ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ixus#NASDAQ">IXUS</a>) $379.8 million added
4. SPDR Dow Jones Industrial Average ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dia#NYSE">DIA</a>): $378.9 million added
5. iShares Core U.S. Aggregate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/agg#NYSE">AGG</a>): $284.5 million added
Outside of the top five ETFs with increased short&nbsp;interest, two regional ETFs were among the 10 with the largest increases.
The iShares MSCI South Korea ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ewy#NYSE">EWY</a>) saw an increase of $229.5 million in short interest in the last 30 days. The ETF now has $713.2 million in short interest, or around 22.75% of the float.
The iShares MSCI Brazil ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ewz#NYSE">EWZ</a>) saw an increase in $225.5 million in short interest in the last 30 days. The ETF now has $1.3 billion in short interest, or around 25.35% of the float.
Highest Short Interest By Percentage: Outside of the large dollar amounts that are short particular ETFs, an indication of a high short percentage of the float could also indicate sectors and countries that are being bet against.
Here are the ETFs with the highest short interest by percentage:
1. SPDR S&amp;P Retail ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xrt#NYSE">XRT</a>): 193.88% short float, $1.1 billion total short
2. SPDR Series Trust SPDR Homebuilders ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xhb#NYSE">XHB</a>): 57.75% short float, $610.4 million total short
3. SPDR S&amp;P Oil &amp; Gas Explorer &amp; Product (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xop#NYSE">XOP</a>): 52.90% short float, $2.8 billion total short
4. iShares U.S. Home Construction ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/itb#BATS">ITB</a>): 46.39% short float, $557.5 million total short
5. iShares iBoxx High Yield Corporate Bond ETF: 38.8% short float, $6.8 billion total short
Most Crowded Short ETFs: Another indicator of bets against an ETF covering a particular sector or region could be combining the short interest by dollars, short float percent and cost to borrow. S3 ranks the five most crowded ETFs for short interest using a scoring system.
1. SPDR S&amp;P Retail ETF 
(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ewco#NYSE">EWCO</a>)
2. iShares iBoxx High Yield Corporate Bond ETF
3. SPDR S&amp;P Oil &amp; Gas Explorer &amp; Product
4. SPDR S&amp;P Biotech
5. Invesco S&amp;P 500 Equal Weight Communication Services 
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/22/11/29789195/block-is-the-most-shorted-crypto-stock-how-do-coinbase-microstrategy-compare">Block Is The Most Shorted Crypto Stock, How Do Coinbase, MicroStrategy Compare</a>
Photo via Shutterstock.&nbsp;

Penny Stocks

Sector ETFs

SPDR Dow Jones Industrial Average ETF Trust

EWCO

iShares Dow Jones US Homenstruction Index Fund

IXUS

The 10 Most Shorted ETFs: Which Sectors Saw Short Interest Increase?

On CNBC&rsquo;s &ldquo;<a href="https://www.cnbc.com/video/2022/10/26/final-trades-biotech-treasuries-more.html">Halftime Report Final Trades</a>,&rdquo; JPMorgan Private Bank&rsquo;s Anastasia Amoroso chose iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hyg#NYSE">HYG</a>), saying that she wanted &ldquo;something that could potentially beat cash.&rdquo;
The index offers a yield of 9.6%, and the ETF&rsquo;s fundamentals have improved considerably over the years, Amoroso mentioned. &ldquo;These companies are not grappling with floating rate expenses,&rdquo; she added.
Bryn Talkington of Requisite Capital Management said that JPMorgan Equity Premium Income ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jepi#NYSE">JEPI</a>) represents&nbsp;a &ldquo;defensive equity strategy.&rdquo; The ETF sells out of the money calls and its volatility is high with an SEC yield of around 12% annualized, that pays out monthly, she stated.
Check out other ETFs making moves in the <a href="https://www.benzinga.com/premarket/">premarket</a>.
Stephen Weiss of Short Hills Capital Partners said ProShares Short 20+ Yr Treasury (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tbf#NYSE">TBF</a>) is unlikely to go below 4% on the tenure.
Joseph Terranova of Virtus Investment Partners chose iShares Biotechnology ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ibb#NASDAQ">IBB</a>) as his final trade.

JEPI

These 4 ETFs Feature on CNBC's 'Final Trades'

Activist investor Paul Singer is the founder, president and co-CEO of Elliott Management, which was established&nbsp;in 1977. Singer&rsquo;s total net worth is valued at $5.5 billion, making its biggest leap <a href="https://www.benzinga.com/news/large-cap/22/09/28920113/ac-milan-owner-paul-singer-holds-these-2-high-yielding-investments-as-his-top-positions">from 2020 to 2021</a>, per Forbes.
As of June 2022, Redbird Capital Partners entered into an agreement with Elliott Capital Advisors (part of Elliott Management)&nbsp;to acquire the beleaguered soccer club AC Milan.
The deal gives an enterprise value to the soccer club worth 1.2 billion euros and Elliott Capital&nbsp;Advisors will retain a minority financial interest in the club and seats on the board of directors.
Here are two high-yielding investments Paul Singer&rsquo;s hedge fund is currently shorting.
iShares iBoxx $ High Yield Corporate Bond ETF (ARCA: HYG) is offering a dividend yield of 5.27% or $3.76 per share annually, making monthly payments, with an inconsistent track record of increasing its dividends.
The iShares iBoxx $ High Yield Corporate Bond ETF tracks the investment results of an index composed of U.S. dollar-denominated, high-yield corporate bonds.
This&nbsp;is one of the most widely picked&nbsp;high-yield ETFs and has exposure to a broad range of U.S. high-yield corporate bonds.
Over the course of the second quarter, Singer increased his put position in the&nbsp;ETF by 8 million shares bringing the total position to 10 million shares, accounting for 8.5% of the portfolio.
Also Read:&nbsp;<a href="https://www.benzinga.com/news/22/10/29203495/not-even-the-post-office-is-immune-to-inflation-get-the-forever-stamp-before-its-too-late">Not Even The Post Office Is Immune To Inflation. Get The Forever Stamp Before It&#39;s Too Late.</a>
Energy Select Sector SPDR Fund&nbsp;(ARCA: XLE) is offering a dividend yield of 3.82% or $3.06 per share annually, through quarterly payments, with a decent track record of increasing its dividends once in the past year. The fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Energy Select Sector Index.
The index seeks to provide an effective representation of the energy sector of the S&amp;P 500 Index.
Throughout the second quarter, Elliott Management purchased more than&nbsp;5 million shares of&nbsp;Energy Select Sector SPDR Fund, bringing the total put position to over 10 million shares, accounting for <a href="https://www.benzinga.com/general/22/10/29125182/oil-and-gas-stocks-are-soaring-monday-heres-why">8.5% of the portfolio</a>.
Photo:&nbsp;<a href="https://www.shutterstock.com/g/charnsitr">charnsitr</a>&nbsp;via Shutterstock

Dividends

Eurozone

This Hedge Fund Recently Sold AC Milan And Is Shorting These Two High-Yielding ETFs

Hard Or Soft Landing, A Consistent Story For High Yield

Rate cut odds went up with discretionaries rallying on better than expected UoM consumer confidence and inflation expectations.

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iShares iBoxx $ High Yield Corporate Bond ETF

Overview

iShares iBoxx $ High Yield Corporate Bond ETF (ARCA:HYG), Quote.Headers.trade-ideas