BondBloxx B Rated USD Hi Yld Corp Bd ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns it an Above Average Process Pillar rating. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent firm has some investor-friendly attributes, like overall low fees and continuity among portfolio managers. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

BondBloxx B Rated USD Hi Yld Corp Bd ETF earns an Above Average Process Pillar rating. Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. The most meaningful contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 100% also bolsters the process. Lastly, the process is limited by the size of its portfolio management team, only two portfolio managers.

The investment strategy as stated in the fund's prospectus is: 

The investment seeks to track the investment results of the ICE BofA Single-B US Cash Pay High Yield Constrained Index composed of B (or its equivalent) fixed rate U.S. dollar-denominated, high yield corporate bonds.  The fund will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in high-yield, below-investment grade bonds denominated in U.S. dollars of corporate issuers, either directly or indirectly (e.g., and through derivatives). It is non-diversified.  

 This strategy's 12-month yield is 8.0%, higher than its average peer's 6.3%. Higher yields tend to indicate higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated B. In terms of long-term interest-rate risk, this strategy is on par with peers. The longer a strategy's duration, the more sensitive it is to shifts in interest rates. This fund, with a 3.4-year duration, is expected to gain 3.4% of its net asset value if interest rates drop by 1 percentage point, and vice versa.

Above Average

Process

BondBloxx Investment Management LLC’s team earns An Average People Pillar rating. The main contributor to the rating is the firm's five-year retention rate of 100%. A low cost, with fees that rank in its category's least expensive quintile, also bolsters the rating. Fees reduce net returns, so the managers have a lower expense hurdle to overcome. Lastly, the rating is limited by the number of months that the management team has been running this vehicle together. Since this is a newly incepted product, more time is needed to monitor the team's capability at executing the strategy.

Average

People

Since its inception only two years ago, BondBloxx Investment Management LLC has demonstrated that it can be trusted as much as the next asset manager. As a result, it has an Average Parent Pillar rating. BondBloxx Investment Management LLC currently oversees 25 vehicles, with a total of $2.66 billion under management and a bench of 13 fund managers. BondBloxx Investment Management LLC's management team is composed of mostly veteran managers, averaging 20 years of industry experience. A firm's ability to retain its talent is a crucial indicator of its culture. This has been a strength of BondBloxx Investment Management LLC, which has had lower-than-average manager turnover. 

 BondBloxx Investment Management LLC deserves plaudits for its commitment to low fees for its open-end and exchange-traded funds, which showcases its willingness to prioritize investors. The firm's average net expense ratio across all funds is in the cheapest quintile of firms.  

 To keep an Average rating, BondBloxx Investment Management LLC will be expected to maintain a consistent track record of positive investor experience.

Parent

BondBloxx B-Rated USD High Yield Corporate Bond ETF

XB tracks a market value-weighted index that specifically invests in USD-denominated corporate bonds with a credit rating of B (or its equivalent), based on an average of three main credit rating providers.

BondBloxx BB-Rated USD High Yield Corporate Bond ETF

BondBloxx CCC-Rated USD High Yield Corporate Bond ETF

The outlook for U.S. high yield fixed income may be more constructive than investors realize. High yield is well-known for being riskier than other segments in the fixed income market; however, strong corporate fundamentals have strengthened the integrity of the asset class.

2 Ways to Play U.S. High Yield

High yield continues to live up to its name. In fact, it was the only major fixed income asset class to generate positive performance in August.

High Yield Continues to Bring the High Returns

Issuers of high yield bonds remain resilient going into the second half of 2023, with their balance sheets still well-positioned. And according to BondBloxx, the credit quality breakdown within high yield remains better than before previous downcycles.

Within High Yield, Credit Rating Category Positioning Matters

The prospect for income generation in high yield ETFs has increased significantly with the past year's run-up in yields. But when targeting high yield, investors should be shrewd and selective when picking their entry points.

Picking the Right Entry Point Into High Yield

At a time when equity markets are continuing to wobble, high-yield bonds are currently benefiting from elevated coupon income and are less risky than equities in the current economic environment. The latest rate hike from the Federal Reserve has also contributed to an environment in which high-yield bond funds have become increasingly attractive to investors.

Reap the High Yields of Single-B Bonds With XB

While 2022 has been a historically bad year for bond markets, U.S. high yield bonds told a different story. So-called junk bonds outperformed most fixed income sectors, with significant performance dispersion across industry sectors and credit rating categories.

Access the “Goldilocks” of High Yield Bonds Through XB

High yield is really living up to its name. An Ice Data Services index shows that yields on so-called domestic junk bonds have risen to nearly 8.6% from a mid-August low of 7.4%, reflecting a substantial price drop.

High Yield Is Living Up to its Name

U.S. high yield bonds seeing their biggest one-month rally in a decade suggests that the economy won't fall into a recession. Amid the Federal Reserve's plan to fight inflation with aggressive interest rate hikes, so-called junk bonds gained 5.9% in July and have also been gaining in August, according to Bloomberg.

High Yield Bonds See Biggest One-Month Gain in 10 Years

As fears of a recession diminish and yields fall, companies are once again looking to issue bonds — and not just investment-grade bonds.

High Yield Corporate Bond Sales Bigger in 1 Day Than in All of July

Institutional investors such as pension funds and endowments are eyeing more distressed debt opportunities, anticipating that a recession will allow them to profit from the debt of struggling companies.

Bracing for Recession, Institutional Investors Eye Distressed Debt

With stock markets continuing to be volatile and analysts fearing that a recession could be looming over the horizon, high yield corporate bonds offering weightier yields than they have in recent years may provide investors with better downside protection than stocks, according to Nuveen.

Corporate High Yield Debt May Provide Better Downside Protection Than Stocks

BondBloxx Investment Management announced the launch of three new ETFs, which begin trading today on NYSE Arca. The ETFs track ratings-specific sub-indexes of the ICE BofA US Cash Pay High Yield Constrained Index.

BondBloxx Launches 3 New High Yield Corporate Bond ETFs

iShares BB Rated Corporate Bond ETF

The three funds range from B to CCC credit ratings.

News for BondBloxx B-Rated USD High Yield Corporate Bond ETF ETF (XB)