iShares iBoxx $ High Yield Corporate Bond ETF is the largest Junk Bond ETF (HYG). It tracks the Markit iBoxx USD Liquid High Yield Index and holds nearly 1,000 high-yield corporate bonds, with an effective duration of 3.75 years.
Year-to-date, investors have pulled $1.81 billion from HYG. Over 85% of the ETF’s holdings are rated BB or B, but HYG does devote 10% of its portfolio to highly speculative CCC-rated bonds. The fund has a 30-day SEC yield of 5.84% and charges 0.49% per year.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK) is the second-largest junk bond ETF with about $1 billion by assets. It tracks the Bloomberg Barclays High Yield Very Liquid Index and “seeks to provide a a diversified exposure to US dollar-denominated high yield corporate bonds with above-average liquidity.
JNK, holds over 900 junk bonds. The fund’s option-adjusted duration if just over 4 years and its yield to maturity is 6.61%.
Over 86% of JNK’s holdings are rated BB or B, but over 13% carry the speculative CCC rating as well. JNK compensates investors for the risk with a 30-day SEC yield of 6.17%.
HYG Vs JNK
The chart below illustrates the performance between the two Junk Bond ETFs:
HYG is consistently outperforming JNK.
- ETFtrends.com, Tom Lydon, 2018-08-01, “The King of Junk Bond ETFs”
- ETFtrends.com, Tom Lydon, 2018-08-02, “An Old Favourite Among Junk Bond ETFs”