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Is FlexShares High Yield Value-Scored Bond ETF (HYGV) a Strong ETF Right Now?
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The FlexShares High Yield Value-Scored Bond ETF (HYGV - Free Report) made its debut on 07/17/2018, and is a smart beta exchange traded fund that provides broad exposure to the High-Yield/Junk Bond ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $1.48 billion, making it one of the larger ETFs in the High-Yield/Junk Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NORTHERN TRUST HY VLU-SCRD US CORP BD ID.
The Northern Trust High Yield Value-Scored US Corporate Bond Index measures the performance of a diversified universe of high yield, US-dollar denominated bonds of companies exhibiting favorable fundamental qualities, market valuations and liquidity.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for HYGV are 0.37%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 8.75%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Neptune Bidco Us Inc Callable Notes Fixed 9.29%-9.29%-4-15-2029 accounts for about 1.04% of the fund's total assets, followed by Venture Global Lng Inc Callable Notes Fixed 8.125%-8.13%-6-1-2028 (VENLNG) and Staples Inc Callable Notes Fixed 7.5% 15/apr/2026-7.50%-4-15-2026 .
HYGV's top 10 holdings account for about 6.69% of its total assets under management.
Performance and Risk
The ETF has added about 1.89% and it's up approximately 12.59% so far this year and in the past one year (as of 03/26/2024), respectively. HYGV has traded between $38.51 and $41.20 during this last 52-week period.
The fund has a beta of 0.50 and standard deviation of 8.73% for the trailing three-year period. With about 875 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares High Yield Value-Scored Bond ETF is not a suitable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Broad USD High Yield Corporate Bond ETF (USHY - Free Report) tracks BofA Merrill Lynch U.S. High Yield Constrained Index and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG - Free Report) tracks Markit iBoxx USD Liquid High Yield Index. IShares Broad USD High Yield Corporate Bond ETF has $11.87 billion in assets, iShares iBoxx $ High Yield Corporate Bond ETF has $15.44 billion. USHY has an expense ratio of 0.08% and HYG charges 0.49%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk Bond ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is FlexShares High Yield Value-Scored Bond ETF (HYGV) a Strong ETF Right Now?
The FlexShares High Yield Value-Scored Bond ETF (HYGV - Free Report) made its debut on 07/17/2018, and is a smart beta exchange traded fund that provides broad exposure to the High-Yield/Junk Bond ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Flexshares. It has amassed assets over $1.48 billion, making it one of the larger ETFs in the High-Yield/Junk Bond ETFs. Before fees and expenses, this particular fund seeks to match the performance of the NORTHERN TRUST HY VLU-SCRD US CORP BD ID.
The Northern Trust High Yield Value-Scored US Corporate Bond Index measures the performance of a diversified universe of high yield, US-dollar denominated bonds of companies exhibiting favorable fundamental qualities, market valuations and liquidity.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for HYGV are 0.37%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 8.75%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Neptune Bidco Us Inc Callable Notes Fixed 9.29%-9.29%-4-15-2029 accounts for about 1.04% of the fund's total assets, followed by Venture Global Lng Inc Callable Notes Fixed 8.125%-8.13%-6-1-2028 (VENLNG) and Staples Inc Callable Notes Fixed 7.5% 15/apr/2026-7.50%-4-15-2026 .
HYGV's top 10 holdings account for about 6.69% of its total assets under management.
Performance and Risk
The ETF has added about 1.89% and it's up approximately 12.59% so far this year and in the past one year (as of 03/26/2024), respectively. HYGV has traded between $38.51 and $41.20 during this last 52-week period.
The fund has a beta of 0.50 and standard deviation of 8.73% for the trailing three-year period. With about 875 holdings, it effectively diversifies company-specific risk.
Alternatives
FlexShares High Yield Value-Scored Bond ETF is not a suitable option for investors seeking to outperform the High-Yield/Junk Bond ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Broad USD High Yield Corporate Bond ETF (USHY - Free Report) tracks BofA Merrill Lynch U.S. High Yield Constrained Index and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG - Free Report) tracks Markit iBoxx USD Liquid High Yield Index. IShares Broad USD High Yield Corporate Bond ETF has $11.87 billion in assets, iShares iBoxx $ High Yield Corporate Bond ETF has $15.44 billion. USHY has an expense ratio of 0.08% and HYG charges 0.49%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the High-Yield/Junk Bond ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.