The issuer of the HYRM ETF, known as the High Yield Risk Mitigation ETF, is committed to providing investors with a unique approach to navigating the high-yield corporate bond market. Using a passive indexing strategy, this issuer seeks to achieve investment results that correspond to the performance of the Underlying Index, which incorporates quantitative market risk signals derived from the Cboe Volatility Index (VIX) and the Moving Average Convergence Divergence (MACD). By dynamically allocating between the Solactive USD High Yield Corporates Total Market Index and a Cash Position, based on these risk signals, the issuer aims to mitigate risks during adverse market conditions and capture opportunities during periods of lower market risk. The High Yield Bond Position includes a diversified basket of US dollar-denominated high-yield corporate bonds, while the Cash Position accrues interest at the Effective Federal Funds Rate, making this ETF a versatile option for investors looking to navigate the high-yield corporate bond market intelligently.
The Highland iBoxx Senior Loan ETF (HYRM) primarily focuses on providing investors exposure to senior loans, which are loans made to companies with below-investment-grade credit ratings. Unlike traditional dividend-focused ETFs, HYRM's income generation is distinct, as it aims to reflect the performance of the Markit iBoxx USD Liquid Leveraged Loan Index. The dividends distributed by HYRM are influenced by interest payments received from the underlying senior loans, typically occurring periodically. Investors considering HYRM should be aware that the eligibility, distribution, and dividend policies are intricately linked to the performance of the leveraged loan market and the creditworthiness of the companies included in the index. While HYRM may offer attractive income potential, its unique focus on senior loans introduces a different risk profile compared to more conventional dividend-oriented ETFs.
Tracking the performance of the US dollar-denominated high yield corporate bond market is the primary objective of the HYRM Tracking ETF. This exchange-traded fund utilizes a passive investment approach to closely follow the movements of the Underlying Index. The Underlying Index employs a rules-based allocation mechanism that shifts between the Solactive USD High Yield Corporates Total Market Index (High Yield Bond Position) and a USD cash position accruing interest at the Effective Federal Funds Rate (Cash Position) based on quantitative market risk signals from the Cboe Volatility Index (VIX) and the Moving Average Convergence Divergence (MACD). When market risk is low, it allocates to the High Yield Bond Position, and when risk is high, it moves to the Cash Position. The High Yield Bond Position consists of US dollar-denominated high yield corporate bonds from developed market companies with sub-investment grade ratings, while the Cash Position includes a USD cash component accruing interest. The ETF provides investors with a convenient way to access the high yield corporate bond market while dynamically adjusting its allocation based on market conditions.
The correlation aspect of the Highland iBoxx Senior Loan ETF plays a crucial role in understanding its behavior in relation to the broader U.S. high yield corporate bond market and the Effective Federal Funds Rate. The fund utilizes a rules-based allocation mechanism based on quantitative market risk signals, primarily the Cboe Volatility Index (VIX) and the Moving Average Convergence Divergence (MACD), to determine its exposure to high yield bonds or cash positions. When market risk is relatively low, the fund allocates to the high yield bond position, while it switches to the cash position during periods of elevated risk. The ETF's investment strategy primarily involves tracking the Solactive USD High Yield Corporates Total Market Index and managing risk through allocation shifts. For detailed correlation analysis and insights into its behavior, ETF Insider's web app provides a valuable tool with simple visualization capabilities to uncover correlations and overlaps with other US ETFs.
The HYRM Sector ETF primarily focuses on the high yield corporate bond market, with a unique approach to allocation. This ETF utilizes quantitative market risk signals derived from the Cboe Volatility Index (VIX) and the Moving Average Convergence Divergence (MACD) to decide between two positions: the Solactive USD High Yield Corporates Total Market Index (High Yield Bond Position) and a USD cash position accruing interest at the Effective Federal Funds Rate (Cash Position). When market risk is low, it allocates to the High Yield Bond Position, which tracks a basket of US dollar-denominated high yield liquid corporate bonds. Conversely, when market risk is high, it switches to the Cash Position. This tactical approach aims to provide investors with exposure to high yield bonds while managing risk during adverse market conditions.
The exposure characteristic of the HYRM ETF is designed to track the performance of the US dollar-denominated high yield corporate bond market under various market conditions. The ETF follows a rules-based allocation mechanism based on quantitative market risk signals, including the Cboe Volatility Index (VIX) and the Moving Average Convergence Divergence (MACD). When market risk is relatively low, it allocates to the high yield bond position, and when market risk is relatively high, it allocates to a cash position that accrues interest at the Effective Federal Funds Rate. For investors, this ETF provides a flexible approach to gain exposure to the high yield corporate bond market, offering potential returns during favorable market conditions while minimizing risk during adverse ones. Its dynamic allocation strategy aims to balance performance and stability, making it a valuable addition to a diversified portfolio.
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