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Fight Back Rising Rates with This Hedged High-Yield ETF Investors have various options to protect their bond portfolios from inflation, but with the With a focus on high yield, HYHG also gives investors an opportunity to edge out low yields on safe haven Treasury notes or other investment-grade debt. The hedging component consists of short positions in said Treasury notes. HYHG seeks investment results, before fees and expenses, that track the performance of the FTSE High Yield (Treasury Rate-Hedged) Index. Under normal circumstances, the fund will invest at least 80% of its total assets in high-yield bonds included in the index. ....
How Rate-Hedged Bond ETFs Became Bona Fide Retirement Strategies April 1, 2021 Rising Treasury yields often prompt advisors and investors to embrace short-term bonds and related exchange traded funds, but there are other ideas to consider, including rate-hedged bond ETFs. The Data confirm the utility of IGH and HYHG in the current environment. “If, for example, 10-year U.S. Treasury yields rose just a half of a percent (still a low rate for 10-year yields), a typical investment-grade bond portfolio with a duration of 10 could see a five percent reduction in total return. And while short-term bond funds are an option to help reduce rate risk, they cannot eliminate it,” according to ProShares research. ....