iShares Interest Rate Price, Forecast, Insider, Ratings, Fundamentals & Signals

The iShares Interest Rate Hedged High Yield Bond ETF (HYGH) offers investors exposure to high-yield corporate bonds while mitigating interest rate risk. HYGH achieves this by investing in the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and maintaining short positions in interest rate swaps.

Traders have dialed back their expectations for immediate Fed rate cuts, now viewing them as less likely in the near term. Investors can navigate this edgy investing backdrop with these ETFs.

HYGH allows investors to trade a view on credit spreads. Credit spreads are currently at historically low levels, but there are concerns about weaker corporate balance sheets and increased credit risk perception. HYGH yields nicely, and the lack of duration is also a benefit if markets are disappointed with the pace of disinflation, but we think credit risk is understated.

These are the top ETF events in the month of September that could be under watch in October.

HYGH invests in high yield bonds, and hedges its interest rate exposure. The fund has outperformed in the recent past, and yields more than its peers. An overview of the fund follows.

iShares Interest Rate Hedged High Yield Bond ETF allows investors to bet on the direction of credit spreads. Contrary to my expectations, HYGH has performed well since the regional bank crisis as policymakers prevented credit contagion through liquidity injections and deposit guarantees. Another technical reason for tighter credit spreads is that the all-in yield for high-yield bonds is now attractive, so investors have been buying.

Fed Chair Jerome Powell recently stated that most central bank officials anticipate raising interest rates by the end of 2023. These ETFs are likely to win in a rising rate environment.

iShares Interest Rate Hedged High Yield Bond ETF is a complementary product to iShares iBoxx $ High Yield Corporate Bond ETF, aiming to capture credit spreads with a near-flat duration. HYGH has outperformed HYG and JNK in a rising interest rate environment but will underperform as rates decrease due to its interest rate swaps. The article recommends selling HYGH and buying into HYG for investors seeking U.S. high-yield exposure, as HYGH will face headwinds once rates start decreasing.

The HYGH ETF provides interest rate hedged exposure to high yield bonds. Credit spreads are rapidly widening due to contagion risks from regional bank failures.

The HYGH ETF provides interest rate hedged exposure to high yield bonds. It can be thought of as a pure-play on the direction of credit spreads.