SJNK - SJNK ETF: If You Really Want High-Yield Exposure

2024-04-25 09:51:10 ET

Summary

• Fixed-income markets are uncertain due to interest rate uncertainty, but there are opportunities in high-yield credit.
• The SPDR Bloomberg Short-Term High Yield Bond ETF is a well-rounded short-term high-yield fixed-income ETF.
• Our view on bond risk premiums paired with SJNK ETF's duration metrics conveys upside potential.
• Although moderately cyclical, SJNK ETF seems like a "throughout the cycle" dividend play.
• Risks such as inconsistent sectoral interest coverage ratios and interest rate unpredictability must be considered.

Fixed-income markets are at a pivotal point, given the level of interest rate uncertainty. As explained later in the article, we hold a bearish outlook on most high-yield credit vehicles. However, we recognize that outliers do exist. Moreover, we know some investors have an appetite for high-yield credit. As such, we decided to delve into the SPDR® Bloomberg Short-Term High Yield Bond ETF (NYSEARCA: SJNK ) , a short-term high-yield fixed-income ETF with well-rounded prospects. ...

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