SHYG: The Truth Behind The Numbers
The iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) provides exposure to short-term high-yield bonds. However, its reported yield-to-maturity is misleading due to a few distressed assets. Investors should anticipate more realistic returns around 6.4% instead of the headline figure.
- ▪SHYG has a duration of 2.12 years.
- ▪The headline yield-to-maturity of 7.34% is skewed by distressed holdings.
- ▪The normalized average yield-to-maturity for 91% of SHYG's assets is 6.40%.
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