FlexShares® High Yield Value-Scored Bond Index Fund (HYGV)

Overview

The FlexSharesu00ae High Yield Value-Scored Bond Index Fund (HYGV) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust High Yield Value-Scored US Corporate Bond IndexSM. It focuses on high-yield corporate bonds, using a value-scoring methodology to select securities.

Reputation and Reliability

FlexShares is a suite of ETFs offered by Northern Trust Asset Management, known for its strong reputation and reliability in providing investment solutions.

Management Expertise

Northern Trust Asset Management has extensive experience in managing fixed income investments, with a dedicated team of professionals overseeing the fund's strategy.

Goal

To provide investment results that generally correspond to the price and yield performance, before fees and expenses, of the Northern Trust High Yield Value-Scored US Corporate Bond IndexSM.

Investment Approach and Strategy

Strategy: The fund aims to track a specific index, the Northern Trust High Yield Value-Scored US Corporate Bond IndexSM.

Composition The ETF primarily holds high-yield corporate bonds.

Market Share: HYGV's market share within the high-yield bond ETF segment varies depending on data source and time period.

Total Net Assets (AUM): 638735282

Key Competitors

• iShares iBoxx High Yield Corporate Bond ETF (HYG)
• SPDR Bloomberg High Yield Bond ETF (JNK)
• VanEck High Yield Muni ETF (HYD)

Competitive Landscape

The high-yield bond ETF market is competitive, with several large players. HYGV differentiates itself through its value-scoring methodology, potentially offering a different risk/return profile compared to competitors that track broader high-yield indices. However, its AUM is much smaller than the leading ETFs, which can impact liquidity. The AUM of the competitive landscape is highly skewed to HYG and JNK, with HYGV far behind.

Historical Performance: Historical performance data is available from the FlexShares website and financial data providers.

Benchmark Comparison: Comparison to the Northern Trust High Yield Value-Scored US Corporate Bond IndexSM would be needed to assess effectiveness.

Expense Ratio: 0.37

Average Trading Volume

HYGV's average trading volume can vary but is generally lower than the largest high-yield bond ETFs, indicating potentially lower liquidity.

Bid-Ask Spread

The bid-ask spread fluctuates based on market conditions, with wider spreads occurring during periods of higher volatility.

Market Environment Factors

Economic indicators such as interest rates, credit spreads, and default rates, as well as sector-specific factors affecting the issuers of high-yield bonds, influence HYGV's performance.

Growth Trajectory

The growth trajectory depends on investor demand for high-yield bonds and the effectiveness of the fund's value-scoring methodology.

Competitive Edge

HYGV's competitive edge lies in its value-scoring methodology, which aims to identify undervalued high-yield bonds. This approach seeks to enhance returns and manage risk by focusing on securities with attractive valuations. However, it may underperform relative to broader indices during periods when value investing is out of favor. The smaller AUM is a disadvantage to liquidity.

Volatility

HYGV's volatility is characteristic of high-yield bond funds, meaning it can fluctuate more than investment-grade bond funds due to the higher credit risk of its holdings.

Market Risk

The fund is exposed to market risk, including credit risk (the risk of default by bond issuers) and interest rate risk (the risk that rising interest rates will decrease bond values).

Ideal Investor Profile

The ideal investor is one seeking income from high-yield bonds, with a tolerance for higher risk and volatility than investment-grade bonds, and believes in a value-oriented investment approach.

Market Risk

It is suitable for long-term investors seeking income but not for risk-averse investors. It can be utilized by active traders but is more suited for passive, longer-term holding.

FlexSharesu00ae High Yield Value-Scored Bond Index Fund (HYGV) is designed for investors seeking high-yield corporate bond exposure using a value-scoring methodology. Its performance is tied to the high-yield market and the success of its value-based selection process. It offers a differentiated approach compared to broad high-yield ETFs, but comes with potential drawbacks in terms of liquidity and performance deviations from standard indices. The expense ratio is relatively low, and the fund is managed by a well-respected firm, Northern Trust.

Data Sources:

• FlexShares website
• Morningstar
• ETFdb.com
• Bloomberg

Disclaimers:

The information provided is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions.