WisdomTree Interest Rate Hedged High Yield Bond Fund (HYZD)

ETF WisdomTree Interest Rate Hedged High Yield Bond Fund Summary

Profile:

The WisdomTree Interest Rate Hedged High Yield Bond Fund (HYIH) is an exchange-traded fund (ETF) that invests in high-yield corporate bonds while aiming to mitigate interest rate risk. It primarily focuses on the high-yield corporate bond market, with an emphasis on reducing potential losses from rising interest rates.

Objective:

HYIH's primary objective is to provide investors with a high level of current income and capital appreciation while mitigating interest rate risk. It aims to achieve this by investing in a portfolio of high-yield bonds and utilizing interest rate derivatives to hedge against rising rates.

Issuer:

WisdomTree Investments, Inc. is the issuer of HYIH.

• Reputation and Reliability: WisdomTree is a well-established and reputable asset management firm with over $88.6 billion in assets under management as of October 31, 2023. It has a strong track record of innovation and product development.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income and risk management.

Market Share:

HYIH has a market share of approximately 0.7% in the high-yield bond ETF space.

Total Net Assets:

As of November 2nd, 2023, HYIH has total net assets of approximately $1.22 billion.

Moat:

HYIH's competitive advantages include:

• Unique Hedging Strategy: The fund's focus on mitigating interest rate risk through the use of derivatives differentiates it from other high-yield bond ETFs.
• Experienced Management Team: The team's expertise in fixed income and risk management contributes to the fund's performance and risk management.
• Cost Efficiency: The fund's expense ratio of 0.35% is relatively low compared to other high-yield bond ETFs.

Financial Performance:

HYIH has delivered a positive return since its inception in 2013. The fund's performance has generally been in line with its benchmark, the ICE BofA US High Yield Constrained Index.

Benchmark Comparison:

HYIH has outperformed its benchmark index in certain periods, particularly during times of rising interest rates.

Growth Trajectory:

The high-yield bond market is expected to continue to grow in the coming years, driven by factors such as low-interest rates and strong corporate earnings. This could benefit HYIH's growth trajectory.

Liquidity:

HYIH has an average daily trading volume of approximately 250,000 shares, indicating good liquidity.

Bid-Ask Spread:

The fund's bid-ask spread is typically tight, ranging between 0.01% and 0.03%.

Market Dynamics:

Factors affecting HYIH's market environment include:

• Interest Rate Environment: Rising interest rates can negatively impact high-yield bond prices.
• Economic Growth: Strong economic growth can support the high-yield bond market.
• Creditworthiness of Issuers: The creditworthiness of the issuers in the fund's portfolio can impact its performance.

Competitors:

HYIH's main competitors include:

• iShares Interest Rate Hedged High Yield Bond ETF (HYGH)
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK)

Expense Ratio:

HYIH has an expense ratio of 0.35%.

Investment Approach and Strategy:

• Strategy: HYIH tracks the ICE BofA US High Yield Constrained Index, which includes high-yield corporate bonds with a minimum credit rating of B-.
• Composition: The fund primarily invests in high-yield corporate bonds, with a focus on sectors such as energy, financials, and industrials. It also utilizes interest rate derivatives to hedge against rising rates.

Key Points:

• Aims to provide high current income and capital appreciation.
• Focuses on high-yield corporate bonds.
• Employs interest rate hedging strategies.
• Managed by an experienced team.
• Relatively low expense ratio.

Risks:

• Interest Rate Risk: Rising interest rates can negatively impact the value of the fund's holdings.
• Credit Risk: The fund invests in high-yield bonds, which carry a higher risk of default than investment-grade bonds.
• Market Risk: The fund's performance is dependent on the overall performance of the high-yield bond market.

Who Should Consider Investing:

HYIH may be suitable for investors seeking:

• High current income.
• Potential for capital appreciation.
• Mitigation of interest rate risk.
• Exposure to the high-yield bond market.

Fundamental Rating Based on AI:

Based on an AI-based analysis of HYIH's financial health, market position, and future prospects, the fund receives a rating of 7 out of 10. The AI analysis considers factors such as the fund's performance history, expense ratio, and portfolio composition.

Resources and Disclaimers:

• WisdomTree Website: https://www.wisdomtree.com/us/etfs/equity/hyih
• ETF.com: https://www.etf.com/HYIH
• Morningstar: https://www.morningstar.com/etfs/arcx/hyih/quote

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.