FDHY - FDHY: Not The Time For Credit Risk

2024-06-17 15:23:00 ET

Summary

• Bearish on credit risk, junk debt is mispriced relative to high-quality bonds.
• Fidelity High Yield Factor ETF offers exposure to high-yield corporate bonds with strong diversification and credit quality.
• FDHY ETF's actively managed structure and quantitative model may not guarantee outperformance, interest rate risk is a factor to consider.

Allow me to start off by saying I am bearish on credit risk. I think junk debt is grossly mispriced relative to high-quality bonds, and that it's only a matter of time until default risk gets reflected in junk bonds. Having said all that, I've also been bearish on credit since October of last year, and credit spreads have only continued to narrow. So if there's more juice in junk debt, and you want to squeeze as much as possible out of this part of the bond market, then you may want to consider the Fidelity High Yield Factor ETF ( FDHY )....

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