A Big Junk Bond ETF Approaches a Milestone (HYG)

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A Big Junk Bond ETF Approaches a Milestone (HYG)
That makes it the largest high-yield corporate bond ETF trading in the U. S. and the sixth largest bond ETF of any type.
One way of looking at that scenario is that HYG and other heavily traded junk bond ETFs have
enhanced liquidity in a corner of the bond market often known for not being liquid.
The average bid-ask spread on HYG is just a single basis point,
but the average spread on an individual junk bond is 50 basis points, according to data from BlackRock, Inc. (BLK).
During that 2015 event, HYG traded $4.3 billion on Dec. 11, then a record for intraday trading in a corporate bond ETF, according to issuer data.
(See also: Overview of the iShares High Yield Bond ETF.)
That is exactly what the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has done.
The ETF tracks the Markit iBoxx USD Liquid High Yield Index
and has displayed minimal tracking error to that benchmark over its 10 years on the market.
HYG’s liquidity and tight spreads highlight the advantages
that the ETF offers to institutional investors, but that crowd is only part of the ETF’s following.
(See also: Is It Time to Get Out of High-Yield Bond ETFs


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