HYDB: Optimistically Backing High-Yield Corporate Bonds

Summary

  • Softening credit spreads raises the appeal of non-investment grade corporate bonds.
  • The BlackRock Institutional Trust Company N.A. - iShares High Yield Bond Factor ETF provides exposure to companies still on a post-pandemic recovery course.
  • Moderating inflation and lower credit spreads mean cyclical companies in the BBB region could outperform investment-grade corporate and default-free government bonds.
  • BlackRock Institutional Trust Company N.A. - iShares High Yield Bond Factor ETF's monthly dividend distributions allow for favorable compounding. Moreover, the ETF serves easy and affordable access to the U.S. Bond market.
  • Looking for a helping hand in the market? Members of The Factor Investing Hub get exclusive ideas and guidance to navigate any climate. Learn More »

Increased interest rates. Bond coupons, yields and positiv changes in basis points.

Torsten Asmus

We might get a reasonable amount of flak for this article, as many investors fear a recession, and concurrently are staying away from high-yield bonds. However, credit spreads are narrowing, and the equity market is receiving substantial support. Thus, we believe the

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Data by YCharts

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U.S. CCC Credit Spread (Macro Micro)

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U.S. BBB Credit Spread (Macro Micro)

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Sector Allocation (iShares)

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Constituent Credit Ratings (iShares)

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Primary Constituents (iShares)

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Risk Attribution (iShares)

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Seeking Alpha

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This article was written by

Cyclical Investing Made Easy

Quantitative Fund & Research Firm with a Qualitative Overlay.

Coverage: Global Stocks, ETFs, CEFs, and REITs.

Methods: Factor Analysis/Smart Beta, Neural Networks, Street Gossip, and Common Sense.

This is Independent Research and Not Financial Advice.



Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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