High-Yield ETFs Build Presence In Europe As Firms Sense Gap In The Market

April 24, 2012


Only 22 of 2,027 equity ETFs are high-yield focused, but this number is set to increase as fund sponsors around the world, particularly in Europe, race to meet investor demand for attractive income-producing investments, according to an article on Forbes.

During the past month, high-yield ETFs like the Market Vectors International High Yield Bond ETF (NYSEArca: IHY) and the iShares Global ex-USD High Yield Corporate Bond Fund (NYSEArca: HYXU) were launched, demonstrating a growing demand for international debt, reports Forbes.

Also, the article mentioned five European-listed, high-yield ETFs. Those funds drew in $222.4 million—close to half the inflows seen for the year—in the month of March alone. Those funds included:

  • Pimco Short-Term High Yield Corporate Bond Index (LSE: STHY)
  • iShares Markit iBoxx Euro High-Yield Bond (LSE: IHYG)
  • iBoxx Dollar High-Yield Bond (LSE: SHYU)
  • Lyxor ETF iBoxx Liquid High-Yield 30 (LSE: LYQY)
  • SPDR Barclays Capital Euro High-Yield Bond (LSE: SYBJ)


However, the increase in funds in the high-yield ETFs increase the risk of higher volatility and running into an issue of limited liquidity. Those issues could prove to be problematic during portfolio rebalancing, the article said.

Go to Forbes.com for more information.

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