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Goldman Sachs Asset Management, which handles the ETF business, launched a new fixed income fund focused on providing exposure to the high-yield space.
The Goldman Sachs Access High Yield Corporate Bond ETF (GHYB) tracks the Citi Goldman Sachs High Yield Corporate Bond Index. It is the second addition to the bank’s access series, the first being Goldman Sachs Access Investment Grade Corporate Bond ETF, which was launched earlier this year.
Fund Characteristics
The fund follows a rules-based methodology to exclude bonds that have the greatest perceived default risk. It has AUM of $52.5 million and seeks to provide cheap exposure to high-yield bonds. It charges 34 basis points as fees per year and holds 143 junk bonds in its portfolio. It bears less concentration risk as just 15.7% is allocated to the top 10 holdings.
From a sector look, Consumer cyclical, Communications and Consumer Non-cyclical are the top three allocations of this fund, with 21.4%, 20.2% and 13.4% exposure, respectively (as of Sep 13, 2017).
From a credit rating perspective, the fund has 53.9% exposure to BB rated bonds, 43.1% to B rated bonds and 2.8% to CCC rated bond. Therefore, due to its high yield focus, the fund bears default risk. However, it seeks to invest in the higher end of the junk bond space.
Moreover, the fund targets the short to intermediate end of the yield curve, as it has a weighted average maturity of 5.82 years and an effective duration of 3.55 years.
Competition
The fund faces a lot of competition from other high yield funds in the space. Below we discuss a few ETFs that seek to provide exposure to the high-yield space.
iShares 0-5 Year High Yield Corporate Bond ETF (SHYG - Free Report)
This fund has AUM of $3.26 billion and seeks to provide exposure to high-yield bonds. It charges 30 basis points as fees per year and holds 624 junk bonds in its portfolio. From a sector look, Communications, Consumer Non-cyclical and Consumer cyclical are the top three allocations of this fund, with 18.7%, 14.2% and 14.1% exposure, respectively (as of Sep 13, 2017). The fund targets the short end of the yield curve as it has a weighted average maturity of 2.3 years and an effective duration of 2.1 years.
iShares iBoxx $ High Yield Corporate Bond ETF (HYG - Free Report)
This fund has AUM of $18.46 billion and seeks to provide exposure to high-yield bonds. It charges 49 basis points as fees per year and holds 1029 junk bonds in its portfolio. From a sector look, Communications, Consumer Non-cyclical and Consumer cyclical are the top three allocations of this fund, with 25.2%, 13.6% and 13.3% exposure, respectively (as of Sep 13, 2017). The fund targets the short end of the yield curve as it has a weighted average maturity of 4.06 years and an effective duration of 3.52 years.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report)
This fund has AUM of $12.07 billion and seeks to provide exposure to high-yield bonds. It charges 40 basis points as fees per year and holds 949 junk bonds in its portfolio. From a sector look, Industrial, Finance and Utility are the top three allocations of this fund, with 87.3%, 9.3% and 2.9% exposure, respectively (as of Sep 13, 2017). The fund targets the short-to-intermediate end of the yield curve as it has an average maturity of 6.21 years and option adjusted duration of 3.62 years.
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Goldman Sachs Launches Junk Bond ETF
Goldman Sachs Asset Management, which handles the ETF business, launched a new fixed income fund focused on providing exposure to the high-yield space.
The Goldman Sachs Access High Yield Corporate Bond ETF (GHYB) tracks the Citi Goldman Sachs High Yield Corporate Bond Index. It is the second addition to the bank’s access series, the first being Goldman Sachs Access Investment Grade Corporate Bond ETF, which was launched earlier this year.
Fund Characteristics
The fund follows a rules-based methodology to exclude bonds that have the greatest perceived default risk. It has AUM of $52.5 million and seeks to provide cheap exposure to high-yield bonds. It charges 34 basis points as fees per year and holds 143 junk bonds in its portfolio. It bears less concentration risk as just 15.7% is allocated to the top 10 holdings.
From a sector look, Consumer cyclical, Communications and Consumer Non-cyclical are the top three allocations of this fund, with 21.4%, 20.2% and 13.4% exposure, respectively (as of Sep 13, 2017).
From a credit rating perspective, the fund has 53.9% exposure to BB rated bonds, 43.1% to B rated bonds and 2.8% to CCC rated bond. Therefore, due to its high yield focus, the fund bears default risk. However, it seeks to invest in the higher end of the junk bond space.
Moreover, the fund targets the short to intermediate end of the yield curve, as it has a weighted average maturity of 5.82 years and an effective duration of 3.55 years.
Competition
The fund faces a lot of competition from other high yield funds in the space. Below we discuss a few ETFs that seek to provide exposure to the high-yield space.
iShares 0-5 Year High Yield Corporate Bond ETF (SHYG - Free Report)
This fund has AUM of $3.26 billion and seeks to provide exposure to high-yield bonds. It charges 30 basis points as fees per year and holds 624 junk bonds in its portfolio. From a sector look, Communications, Consumer Non-cyclical and Consumer cyclical are the top three allocations of this fund, with 18.7%, 14.2% and 14.1% exposure, respectively (as of Sep 13, 2017). The fund targets the short end of the yield curve as it has a weighted average maturity of 2.3 years and an effective duration of 2.1 years.
iShares iBoxx $ High Yield Corporate Bond ETF (HYG - Free Report)
This fund has AUM of $18.46 billion and seeks to provide exposure to high-yield bonds. It charges 49 basis points as fees per year and holds 1029 junk bonds in its portfolio. From a sector look, Communications, Consumer Non-cyclical and Consumer cyclical are the top three allocations of this fund, with 25.2%, 13.6% and 13.3% exposure, respectively (as of Sep 13, 2017). The fund targets the short end of the yield curve as it has a weighted average maturity of 4.06 years and an effective duration of 3.52 years.
SPDR Bloomberg Barclays High Yield Bond ETF (JNK - Free Report)
This fund has AUM of $12.07 billion and seeks to provide exposure to high-yield bonds. It charges 40 basis points as fees per year and holds 949 junk bonds in its portfolio. From a sector look, Industrial, Finance and Utility are the top three allocations of this fund, with 87.3%, 9.3% and 2.9% exposure, respectively (as of Sep 13, 2017). The fund targets the short-to-intermediate end of the yield curve as it has an average maturity of 6.21 years and option adjusted duration of 3.62 years.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>