BKHY - BKHY: Screening Out Overpriced Credit Risk

2024-04-12 05:00:48 ET

Summary

• BNY Mellon High Yield Beta ETF offers an opportunity to invest in corporate credit while limiting exposure to overpriced and vulnerable bonds.
• BKHY's unique approach to investing, straddling the line between passive and active management, sets it apart from other high-yield bond ETFs.
• BKHY has outperformed the well-established SPDR® Bloomberg High Yield Bond ETF and offers high yield and diversification, but also carries high risk and interest rate sensitivity.

Investing in corporate credit at this point in the cycle is risky to me, given just how narrow credit spreads are. Having said that, there is still opportunity, so long as you access the space by limiting exposure to overpriced and vulnerable bonds. That's why the BNY Mellon High Yield Beta ETF ( BKHY ) is interesting to me. BKHY is a relatively new entrant in the junk bond ETF space, having launched its operations in April 2020. Despite being a newcomer, BKHY has made notable strides, managing to outshine some of the well-established players in the high-yield market, such as the SPDR® Bloomberg High Yield Bond ETF ( JNK )....

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