PIMCO 0-5 Year High Yield Corporate Bond Index Exchange-Traded Fund

HYS

Market cap $1.57B

The Federal Reserve cut rates again on Dec.

PIMCO 0-5 Year High Yield Corporate Bond Index ETF offers a 7% yield from short-maturity junk bonds. HYS has slightly outperformed the benchmark HYG since inception, but shows moderate decay in value and inflation-adjusted income. Several high yield bond ETFs appear more compelling than HYS, notably FALN, HYDB, and SHYG.

HYS is a junk bond ETF focusing on shorter maturity to mitigate risks. HYS is well-diversified across issuers and has outperformed the benchmark HYG since its inception. HYDB looks superior to HYS among risk-mitigating junk bond ETFs, with better risk-adjusted performance and lower fees.

The PIMCO 0-5 Year High Yield Corporate Bond Index ETF gives investors exposure to short-duration high-yield bonds. While HYS may benefit initially from the Fed's rate cuts, historical trends show high-yield bonds underperform during recessions and economic slowdowns. Investors should high grade portfolios now, by considering investment-grade bonds and CLOs.

The iShares iBoxx $ High Yield Corporate Bond ETF is the largest "junk bond" ETF. The PIMCO 0-5 Year High Yield Corporate Bond Index ETF has better return data but seems to have a higher risk portfolio. Both ETFs are reviewed in depth and then compared. My conclusion: it is a toss-up as to which is the better ETF to hold short-term and/or long-term.