Another approach to a differentiated high-yield exposure is fundamentally weighted ETFs, currently offered in the PowerShares Fundamental High Yield Corporate (PHB | C-78). Unlike the aforementioned names, PHB will invest only in high-yield securities (so no BBB exposure).
However, unlike the broad exposure, PHB has no exposure to bonds rated CCC or lower. Therefore, in terms of a risk/return profile, it should fit in between the crossover exposure and broad high yield.
While the option-adjusted spread and yield to worst in PHB are higher than the aforementioned crossover names, they are lower than in HYG and JNK:
In addition, the returns fall in line as well:
One last group I will look at is fallen angels, available via the Market Vectors Fallen Angel (ANGL | C-51). The differentiating factor here is that exposure will only include high-yield bonds that were investment grade at issuance (and have since been downgraded).
While only high yield is included, the makeup of the constituents will be different from the other pure high-yield names previously mentioned: