 Virtus
Newfleet High Yield Bond ETF (BLHY) is an exchange-traded fund (ETF)
that tracks the performance of the Bloomberg Barclays U.S. Corporate
High Yield Very Liquid Index. The fund aims to provide high current
income by investing primarily in high yield corporate bonds, but may
also invest in debt securities issued by other entities, including
government bonds.
BLHY invests in debt securities with ratings
below investment grade, commonly referred to as “junk bonds,” and
generally carries a higher level of credit risk compared to
investment-grade securities. To mitigate the risks associated with
investing in high yield bonds, BLHY employs a fundamental,
research-driven approach to credit analysis, focusing on the issuer's
ability to generate free cash flow and repay debt.
The fund’s
holdings are diversified across sectors, with a focus on those with
higher income potential, including energy, telecommunications, and
consumer cyclical companies. As of March 23, 2023, the top holdings of
the fund include bonds issued by companies such as Frontier
Communications Corporation, Seagate HDD Cayman, and GameStop
Corporation.
BLHY charges an expense ratio of 0.46%, which is
relatively low for high yield bond ETFs. The fund has had a relatively
stable performance history, with a 3-year annualized return of 5.42%
as of February 28, 2023.
Investors seeking high current income
and who are willing to take on the associated risks of investing in
high yield bonds may find BLHY to be a suitable investment option.
However, it is important to keep in mind that investing in high yield
bonds carries a higher level of risk and may not be appropriate for
all investors.
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