6 min readBy Ron Koren ETF Insider
How does the HIYS ETF work?
The HIYS ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The High Yield Corporate Bond ETF (HIYS) is managed by an experienced team at Invesco Advisers, Inc. This actively managed exchange-traded fund seeks to achieve its investment objective by investing in high-yield securities, commonly referred to as junk bonds, with more speculative characteristics than investment-grade securities. The fund focuses on securities rated between B- and BB+ by nationally recognized statistical rating organizations (NRSROs) or deemed to be of comparable quality by the Sub-Adviser. The portfolio managers employ a bottom-up evaluation process, combining fundamental and quantitative analyses, along with a relative value assessment, to make investment decisions. HIYS may also utilize derivative instruments, including swaps, options, futures contracts, and forward foreign currency contracts, to manage risk and portfolio duration. With its focus on high-yield bonds, HIYS provides investors with exposure to the potential returns and risks associated with this segment of the fixed-income market.
The High-Yield Bond ETF (HIYS) focuses on providing investors with exposure to high-yield fixed-income securities, commonly known as junk bonds. While the primary objective of this actively managed exchange-traded fund (ETF) may not be dividends, it seeks to achieve its investment goal by investing in these relatively higher quality below investment grade fixed-income securities. These bonds typically come with more speculative characteristics than investment-grade securities, rated between B- and BB+ by a recognized rating organization. HIYS may also utilize derivatives and other instruments similar to these securities to achieve its goals. The ETF may experience distributions influenced by the performance and dividend policies of the underlying bonds and may offer income potential alongside capital appreciation. It's important to note that up to 10% of the fund's net assets may be allocated to securities rated below B- in case of a rating downgrade, which can impact the dividend distribution strategy.
HIYS, or the Invesco High Yield Bond ETF, is an actively managed exchange-traded fund that aims to achieve its investment objective by investing in relatively higher quality below investment grade fixed-income securities, commonly known as high yield securities or junk bonds. The fund primarily focuses on securities rated between B- and BB+ by a nationally recognized statistical rating organization (NRSRO) or deemed of comparable quality by Invesco Advisers, Inc. It may also invest in securities rated below B- in specific circumstances. The portfolio includes corporate bonds, convertible securities, mortgage-backed securities (MBS), asset-backed securities (ABS), collateralized loan obligations (CLOs), collateralized debt obligations (CDOs), and collateralized mortgage obligations (CMOs).
The correlation aspect of the Invesco High Yield Corporate Bond ETF (HIYS) is known for its strong relationship with the performance of the high-yield bond market. HIYS seeks to achieve its investment objective by investing in below-investment-grade fixed-income securities, commonly referred to as junk bonds. As such, its correlation with the high-yield bond market is expected to be significant, making it a useful tool for investors looking to gain exposure to this segment of the fixed-income market. HIYS's correlation data can be analyzed using ETF Insider's web app, providing deep insights into its performance and its overlap with other assets and sectors within the broader financial landscape.
The HIYS Sector ETF focuses on the high-yield fixed-income securities sector, specifically targeting below investment-grade fixed-income securities, often referred to as junk bonds. With a primary emphasis on securities rated between B- and BB+ or of comparable quality, the fund actively manages its portfolio to seek attractive returns from this higher-risk, high-reward segment of the bond market. The ETF may also invest in derivatives, mortgage-backed securities, asset-backed securities, and engage in currency-related strategies to optimize returns and manage risk. Additionally, the fund's investment approach incorporates bottom-up fundamental analysis, quantitative analysis, and relative value assessments to identify opportunities within the high-yield sector while maintaining diversification across various industries.
The exposure characteristic of the HIYS ETF is centered around high-yield fixed-income securities, commonly known as junk bonds. This actively managed exchange-traded fund seeks to achieve its investment objective by investing primarily in relatively higher quality below investment grade fixed-income securities rated between B- and BB+ or deemed comparable by Invesco Advisers, Inc. The fund may also invest in derivatives, corporate bonds, convertible securities, mortgage-backed securities (MBS), asset-backed securities (ABS), and may use derivative instruments for risk management and portfolio duration control. The portfolio managers employ a bottom-up evaluation process, combining fundamental and quantitative analysis with a relative value assessment to make investment decisions, with a focus on diversifying holdings across various industries while limiting exposure to any single security to 5% of the fund''s net assets. For investors seeking exposure to high-yield fixed-income securities and a diversified approach to credit risk, HIYS ETF provides an avenue to access this market segment.
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