A Seeking Alpha Contribution
- SJNK is cheaper than HYS and has a higher yield.
- HYS has shorter duration and higher credit quality.
- HYS has consistently outperformed SJNK over the past three years.
In part one, we compared the two largest high-yield bond funds: the iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) and the SPDR Barclays Capital High Yield Bond (NYSEARCA:JNK).
In part two, we will compare two short-term high-yield bond funds: the PIMCO 0-5 Year High Yield Corporate Bond (NYSEARCA:HYS) and the SPDR Barclays Short Term High Yield Bond (NYSEARCA:SJNK).
Short-term high-yield bonds are attractive for their shorter duration, yet still have nearly as high of an yield. Even though these two funds have durations roughly 2 years shorter than HYG and JNK, their yields are comparable due to wider spreads versus treasuries at the short end of the yield curve. SJNK’s 30-day SEC yield of 5.85 percent is higher than HYG’s 5.68 percent yield and nearly as high as JNK’s 6.15 percent yield.
Index & Strategy
HYS tracks the BofA Merrill Lynch 0-5 Year US High Yield Constrained Index while SJNK tracks the Barclays US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index. HYS is the older of the two, coming to market in June 2011, while SJNK launched in March 2012…. To Continue Reading Please, Click Here.
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