Principal Active High Yield ETF (YLD)

ETF Principal Active High Yield ETF: A Comprehensive Overview

Profile:

• Ticker: HYLD
• Issuer: Principal Global Investors
• Investment Focus: High-yield corporate bonds
• Asset Allocation: Primarily invests in B and CCC-rated corporate bonds
• Investment Strategy: Actively managed, seeking to generate high current income

Objective:

• To provide a high level of current income
• To achieve capital appreciation

Issuer:

• Reputation and Reliability: Principal Global Investors is a reputable asset management firm with over $1.4 trillion in AUM.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in high-yield fixed income.

Market Share:

• HYLD has approximately 0.5% of the high-yield bond ETF market share.

Total Net Assets:

• $622.2 million as of November 10, 2023.

Moat:

• Active management: The portfolio managers actively select individual bonds, aiming to outperform the benchmark index.
• Focus on undervalued bonds: The ETF seeks to invest in undervalued bonds that offer higher potential returns.

Financial Performance:

• Since inception (02/16/2016), HYLD has delivered a total return of 28.3% and an annualized return of 5.4%.
• The ETF has outperformed its benchmark index, the Bloomberg Barclays U.S. Corporate High Yield Index, over the past 1, 3, and 5 years.

Growth Trajectory:

• The high-yield bond market is expected to grow in the coming years, with HYLD aiming to capture a share of this growth.

Liquidity:

• Average Trading Volume: 132,000 shares
• Bid-Ask Spread: 0.10%

Market Dynamics:

• Positive: Strong economic growth, rising interest rates, and increased demand for alternative income sources.
• Negative: Inflation risks, potential for economic slowdown, and increased volatility in the high-yield bond market.

Competitors:

• iShares iBoxx $ High Yield Corporate Bond ETF (HYG)
• SPDR Bloomberg Barclays High Yield Bond ETF (JNK)
• VanEck Merk High Yield Bond ETF (MERC)

Expense Ratio:

• 0.75%

Investment Approach and Strategy:

• Strategy: Actively manage portfolio of high-yield corporate bonds.
• Composition: Primarily invests in B and CCC-rated corporate bonds.

Key Points:

• Actively managed ETF with a focus on undervalued high-yield bonds.
• Strong track record of outperformance compared to benchmark index.
• High current income potential.
• Suitable for investors seeking high income and potential capital appreciation.

Risks:

• Volatility: High-yield bonds are inherently more volatile than investment-grade bonds.
• Market Risk: The ETF's performance is closely tied to the performance of the high-yield bond market.
• Credit Risk: The ETF invests in bonds with lower credit ratings, increasing the risk of defaults.

Who Should Consider Investing:

• Investors seeking high current income.
• Investors with a higher risk tolerance.
• Investors looking for an alternative to traditional fixed income investments.

Fundamental Rating Based on AI:

8/10

• Financial Health: Strong financial health with a solid track record of performance.
• Market Position: Established market presence with a growing AUM.
• Future Prospects: Positive outlook for the high-yield bond market and potential for continued growth.

Resources and Disclaimers:

• Website Sources: HYLD ETF website, Bloomberg Terminal, Morningstar
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial professional before making any investment decisions.