HYDB: Optimistically Backing High-Yield Corporate Bonds


  • 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

Data by YCharts


U.S. CCC Credit Spread (Macro Micro)


U.S. BBB Credit Spread (Macro Micro)


Sector Allocation (iShares)


Constituent Credit Ratings (iShares)


Primary Constituents (iShares)


Risk Attribution (iShares)


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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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