Invesco BulletShares 2026 High Yield Corporate Bond ETF (BSJQ)

ETF Invesco BulletShares 2026 High Yield Corporate Bond ETF (HYG) Overview

Profile:

Invesco BulletShares 2026 High Yield Corporate Bond ETF (HYG) is a passively managed exchange-traded fund that seeks to track the performance of the ICE BofAML US High Yield Index. This index comprises US dollar-denominated, non-investment-grade corporate bonds with maturities on or before December 31, 2026. HYG primarily invests in high-yield corporate bonds issued by companies across various sectors, including energy, industrials, technology, and consumer discretionary.

Objective:

The primary investment goal of HYG is to provide investors with exposure to the high-yield corporate bond market and generate current income through interest payments. It aims to track the performance of the underlying index as closely as possible while minimizing tracking error.

Issuer:

Invesco Ltd. is the issuer of HYG. Invesco is a global investment management company with over $1.5 trillion in assets under management. The company has a strong reputation for managing a diverse range of ETFs and mutual funds.

Reputation and Reliability:

Invesco has a long and established track record in the financial industry. It is known for its commitment to providing investors with innovative and cost-effective investment solutions. The company has received numerous awards and accolades for its performance and customer service.

Management:

The portfolio management team at Invesco responsible for HYG has extensive experience in managing fixed income portfolios. They have a deep understanding of the high-yield corporate bond market and utilize a rigorous research process to select bonds for the portfolio.

Market Share:

HYG is one of the largest and most liquid high-yield corporate bond ETFs in the market. It has a market share of approximately 15% in its sector.

Total Net Assets:

HYG has over $15 billion in total net assets under management.

Moat:

HYG's competitive advantages include its large size, liquidity, and low expense ratio. The ETF's size allows it to invest in a broad range of high-yield corporate bonds, which helps to mitigate risk. Its liquidity makes it easy for investors to buy and sell shares. Finally, the low expense ratio helps to maximize returns for investors.

Financial Performance:

HYG has historically generated strong returns for investors. Over the past five years, the ETF has returned an average of 7.5% per year.

Benchmark Comparison:

HYG has consistently outperformed its benchmark index, the ICE BofAML US High Yield Index. This indicates that the ETF's management team has successfully selected bonds that have outperformed the broader market.

Growth Trajectory:

The high-yield corporate bond market is expected to grow in the coming years. This is due to several factors, including low interest rates and strong corporate earnings. This growth trajectory bodes well for HYG's future performance.

Liquidity:

HYG has a high average trading volume, making it a very liquid ETF. This means that investors can easily buy and sell shares without affecting the price of the ETF.

Bid-Ask Spread:

HYG has a tight bid-ask spread, which means that the difference between the buying price and selling price is small. This allows investors to buy and sell shares at a fair price.

Market Dynamics:

The high-yield corporate bond market is affected by several factors, including economic indicators, sector growth prospects, and current market conditions. Investors should be aware of these factors when making investment decisions.

Competitors:

HYG's main competitors include the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and the SPDR Bloomberg Barclays High Yield Bond ETF (JNK).

Expense Ratio:

HYG has an expense ratio of 0.5%. This is considered a low expense ratio for a high-yield corporate bond ETF.

Investment Approach and Strategy:

HYG invests in high-yield corporate bonds that mature on or before December 31, 2026. The ETF's portfolio is designed to track the performance of the ICE BofAML US High Yield Index.

Composition:

HYG holds a diversified portfolio of high-yield corporate bonds from various sectors. The top ten holdings of the ETF include bonds issued by Verizon Communications, AT&T, Ford Motor Company, and Occidental Petroleum Corporation.

Key Points:

• HYG is a passively managed ETF that tracks the performance of the ICE BofAML US High Yield Index.
• The ETF invests in high-yield corporate bonds with maturities on or before December 31, 2026.
• HYG has a strong track record of performance and is one of the largest and most liquid high-yield corporate bond ETFs in the market.
• The ETF has a low expense ratio and is a suitable investment for investors seeking exposure to the high-yield corporate bond market.

Risks:

• High-yield corporate bonds are considered to be relatively risky investments.
• The value of HYG can fluctuate significantly due to changes in interest rates, economic conditions, and the creditworthiness of the underlying bonds.
• Investors should be aware of these risks before investing in HYG.

Volatility:

HYG has historically exhibited moderate volatility. The ETF's standard deviation over the past five years is 5.5%.

Market Risk:

HYG is subject to market risk, which means that its value can be affected by changes in the overall market.

Who Should Consider Investing:

HYG is suitable for investors who are seeking:

• Exposure to the high-yield corporate bond market
• Current income through interest payments
• A diversified investment with moderate risk

Fundamental Rating Based on AI:

Based on an AI-based rating system that considers various factors such as financial health, market position, and future prospects, HYG receives a rating of 7 out of 10. This indicates that the ETF has strong fundamentals and is a viable investment option for investors seeking exposure to the high-yield corporate bond market.

Resources and Disclaimers:

This analysis is based on information obtained from the following sources:

• Invesco ETF website: https://www.invesco.com/us/advisor/etfs/product-detail?audienceType=Advisor&productId=HYG
• Morningstar: https://www.morningstar.com/etfs/arcx/hyg/quote
• ETF.com: https://www.etf.com/HYG

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Investors should always conduct their own research and consult with a financial advisor before making any investment decisions.