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High-Yield ETFs at a 52-Week High Ahead of Fed's Decision
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Though several global central banks have been following easy money policies building pressure on the Fed to act along the same lines, odds of a rate cut in Fed’s September meeting are falling. At the time of writing, there was a 54.2% chance of a 25-bp rate cut in the September meeting, down from 87.7% noticed a week ago (read: ETFs to Gain/Lose as Fed Rate Cut Less Likely).
Then again, many market watchers are betting big on a rate cut this month. President Trump has called for a “big” drop in interest rates. The view is mixed. BlackRock’s Rick Rieder believes that the Fed will cut rates by 25 basis points but more easing should be done. Meanwhile, “Barclays chief U.S. economist Michael Gapen said he doesn’t expect much from the Fed,” as quoted on CNBC. Some market watchers are of the view that the U.S. central bank may cut rates and offer a hawkish guidance alongside.
Amid such a situation, high-yield securities are soaring higher. This is because even if stocks or funds decline, higher current income would go a long way in protecting investors’ total returns. After all, high-yield ETFs provide investors with avenues to make up for capital losses, if it happens at all. If the Fed meeting does not turn out as dovish as expected, yields may go up. In such a scenario, investors may be in need of some benchmark-beating products.
Below we highlight a few high-yield ETFs that offer solid yields at the current level and are near a 52-week high.
High-Yield ETFs at a 52-Week High
Invesco BulletShares 2026 High Yield Corporate Bond ETF (BSJQ - Free Report) — Yield 5.81% annually
The underlying Nasdaq BulletShares USD High Yield Corporate Bond 2026 Index represents the performance of a held-to-maturity portfolio of US dollar-denominated, high yield corporate bonds with effective maturities in 2026. The expense ratio of the fund is 0.42%.
The underlying Bloomberg Barclays US High Yield Fallen Angel 3% Capped Index of the fund reflects the performance of U.S. dollar denominated, high-yield corporate bonds that were previously rated investment grade. The fund charges 25 bps in fees.
First Trust Preferred Securities and Income ETF (FPE - Free Report) — Yield 5.07%
The First Trust Preferred Securities and Income ETF is an actively-managed ETF. The fund invests at least 80% of its net assets in preferred securities and income producing debt securities including corporate bonds, high-yield securities and convertible securities. The fund charges 85 bps in fees.
S&P High Income Infrastructure Invesco ETF — Yield 4.96%
The underlying S&P High Income Infrastructure Index is designed to measure and monitor the performance of 50 high-yielding global equity securities of companies that engage in various infrastructure-related sub-industries. The fund charges 45 bps in fees.
First Trust Tactical High Yield ETF (HYLS - Free Report) — Yield 4.94%
The First Trust Tactical High Yield ETF is an actively-managed exchange-traded fund. The fund’s primary investment objective is to provide current income. The fund’s secondary investment objective is to provide capital appreciation. The expense ratio of the fund is 1.16%.
Fundamental High-Yield Corp Bond Invesco ETF (PHB - Free Report) — Yield 4.09%
The underlying RAFI Bonds US High Yield 1-10 Index is comprised of U.S. dollar-denominated bonds that are registered with the SEC or that are Rule 144A securities that provide for registration rights and whose issuers are public companies listed on a major U.S. stock exchange. The fund charges 50 bps in fees.
iShares Broad USD High Yield Corp Bond ETF (USHY - Free Report) — Yield 6.00%
The underlying ICE BofA Merrill Lynch US High Yield Constrained Index comprises U.S. dollar-denominated, high-yield corporate bonds. The fund charges 22 bps in fees.
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High-Yield ETFs at a 52-Week High Ahead of Fed's Decision
Though several global central banks have been following easy money policies building pressure on the Fed to act along the same lines, odds of a rate cut in Fed’s September meeting are falling. At the time of writing, there was a 54.2% chance of a 25-bp rate cut in the September meeting, down from 87.7% noticed a week ago (read: ETFs to Gain/Lose as Fed Rate Cut Less Likely).
The United States is still positioned better than most economies. Upbeat consumer confidence and trade optimism are sweet spots. China has already exempted import tariffs on more than a dozen U.S. goods for the first time since the trade war started early last year (read: ETF Winners as Sino-US Trade War Tensions Ebb).
Then again, many market watchers are betting big on a rate cut this month. President Trump has called for a “big” drop in interest rates. The view is mixed. BlackRock’s Rick Rieder believes that the Fed will cut rates by 25 basis points but more easing should be done. Meanwhile, “Barclays chief U.S. economist Michael Gapen said he doesn’t expect much from the Fed,” as quoted on CNBC. Some market watchers are of the view that the U.S. central bank may cut rates and offer a hawkish guidance alongside.
Amid such a situation, high-yield securities are soaring higher. This is because even if stocks or funds decline, higher current income would go a long way in protecting investors’ total returns. After all, high-yield ETFs provide investors with avenues to make up for capital losses, if it happens at all. If the Fed meeting does not turn out as dovish as expected, yields may go up. In such a scenario, investors may be in need of some benchmark-beating products.
Below we highlight a few high-yield ETFs that offer solid yields at the current level and are near a 52-week high.
High-Yield ETFs at a 52-Week High
Invesco BulletShares 2026 High Yield Corporate Bond ETF (BSJQ - Free Report) — Yield 5.81% annually
The underlying Nasdaq BulletShares USD High Yield Corporate Bond 2026 Index represents the performance of a held-to-maturity portfolio of US dollar-denominated, high yield corporate bonds with effective maturities in 2026. The expense ratio of the fund is 0.42%.
iShares US Fallen Angels ETF (FALN - Free Report) — Yield5.57%
The underlying Bloomberg Barclays US High Yield Fallen Angel 3% Capped Index of the fund reflects the performance of U.S. dollar denominated, high-yield corporate bonds that were previously rated investment grade. The fund charges 25 bps in fees.
First Trust Preferred Securities and Income ETF (FPE - Free Report) — Yield 5.07%
The First Trust Preferred Securities and Income ETF is an actively-managed ETF. The fund invests at least 80% of its net assets in preferred securities and income producing debt securities including corporate bonds, high-yield securities and convertible securities. The fund charges 85 bps in fees.
S&P High Income Infrastructure Invesco ETF — Yield 4.96%
The underlying S&P High Income Infrastructure Index is designed to measure and monitor the performance of 50 high-yielding global equity securities of companies that engage in various infrastructure-related sub-industries. The fund charges 45 bps in fees.
First Trust Tactical High Yield ETF (HYLS - Free Report) — Yield 4.94%
The First Trust Tactical High Yield ETF is an actively-managed exchange-traded fund. The fund’s primary investment objective is to provide current income. The fund’s secondary investment objective is to provide capital appreciation. The expense ratio of the fund is 1.16%.
Fundamental High-Yield Corp Bond Invesco ETF (PHB - Free Report) — Yield 4.09%
The underlying RAFI Bonds US High Yield 1-10 Index is comprised of U.S. dollar-denominated bonds that are registered with the SEC or that are Rule 144A securities that provide for registration rights and whose issuers are public companies listed on a major U.S. stock exchange. The fund charges 50 bps in fees.
iShares Broad USD High Yield Corp Bond ETF (USHY - Free Report) — Yield 6.00%
The underlying ICE BofA Merrill Lynch US High Yield Constrained Index comprises U.S. dollar-denominated, high-yield corporate bonds. The fund charges 22 bps in fees.
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 >>