"HYG tracks the iBoxx USD Liquid High Yield Index, a rules-based benchmark of U.S. dollar-denominated corporate bonds rated below investment grade, or 'junk bonds.' HYG collects coupon payments across roughly 1,228 bonds and passes the income to shareholders as monthly distributions."
"The average credit rating sits at roughly B+, consistent with a diversified portfolio rather than concentrated bets on the riskiest issuers. The option-adjusted spread (OAS) stood near 262 basis points, reflecting favorable corporate conditions and mean investors are not pricing in significant credit risk."
HYG tracks the iBoxx USD Liquid High Yield Index, collecting coupon payments from approximately 1,228 junk bonds. It offers a dividend yield of around 6.7% and an average yield to maturity of 6.72%. The portfolio mainly consists of BB and B rated bonds, with an average credit rating of B+. HYG has a higher expense ratio than its competitor JNK, but both have similar yields. The option-adjusted spread indicates favorable corporate conditions, reflecting investor confidence in credit risk.
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