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Inspire Advisors LLC lifted its stake in shares of iShares Interest Rate Hedged High Yield Bond ETF (NYSEARCA:HYGH) by 18.6% during the undefined quarter, according to the company in its most recent 13F filing with the SEC. The institutional investor owned 60,225 shares of the company's stock after purchasing an additional 9,438
Osaic Holdings Inc. grew its position in iShares Interest Rate Hedged High Yield Bond ETF (NYSEARCA:HYGH) by 26.1% in the undefined quarter, according to its most recent disclosure with the SEC. The fund owned 33,101 shares of the company's stock after buying an additional 6,861 shares during the period. Osaic Holdings Inc.
iShares Interest Rate Hedged High Yield Bond ETF offers a high yield with an effective interest rate hedge, outperforming peers in total return and risk metrics. HYGH's portfolio is primarily HYG, with interest rate swaps reducing effective duration to near zero. The fund's hedging strategy excelled during periods of rising rates, but chronic value erosion in junk bonds remains a concern.
HYGH's high expense ratio is a major drawback, especially compared to cheaper high yield ETFs like SPHY and USHY. High yield bond spreads are currently tight relative to historical norms. Fed rate cuts are likely to benefit high yield ETFs which have moderate interest rate exposure.
The Fed slashes rates by 25 basis points, as expected but provides a somewhat hawkish guidance.
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iShares Interest Rate Hedged High Yield Bond ETF invests in high-yield bonds while using derivatives to hedge interest rate variations. HYGH underperformed the non-hedged underlying index when rates were staying in a range, then it outperformed when they surged. HYGH is the largest, most liquid and best performing “junk bond” ETF with an interest rate hedge.
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