Top Performing Fixed Income Funds from 2016 to 2017
This article reviews the top fixed income funds and ETFs from 2016–17, highlighting strategies, risks, and benefits of leading bond investment options. It covers domestic and international funds, including high-yield and emerging market debt, providing valuable insights for investors seeking stable income through bond markets. The guide helps investors evaluate a diverse range of fixed income choices suitable for different risk tolerances and investment horizons.
Top Fixed Income Investment Funds in 2016–2017
Fixed income investments remain a popular choice among investors, offering predictable returns based on a fixed schedule, though the exact payments may fluctuate. Besides individual bonds, the fixed income category includes money market funds, certificates of deposit (CDs), bond mutual funds, and exchange-traded funds (ETFs). This article explores some of the best fixed income ETFs and funds from 2016 and 2017, showcasing a mix of domestic and international securities across various credit qualities and maturities.
Fixed income ETFs are portfolios of bonds traded as single units throughout trading hours. There’s a diverse selection of top fixed income funds that include both U.S. and foreign bonds, providing options for different risk levels and investment objectives.
VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL)
This ETF tracks a weighted index of bonds that were initially rated investment grade but later downgraded to sub-investment grade, known as “fallen angels.” It seeks value in the high-yield arena by targeting distressed bonds, which may experience price appreciation if credit upgrades occur. ANGL mainly issues in U.S. dollars, carries credit and interest rate risks, and holds a sizable portion of non-U.S. debt, offering diversified exposure.
ProShares High Yield-Interest Rate Hedged ETF (HYHG)
This fund aims to hedge interest rate risk by shorting 2-year, 5-year, and 10-year Treasuries, while maintaining exposure to high-yield USD-denominated debt from North America. It invests in recent issuance from U.S. and Canadian companies, reflecting a strategy to manage interest rate fluctuations. While offering credit exposure, it involves risks related to liquidity, spreads, and moderate trading volumes.
Guggenheim BulletShares 2022 High Yield Corporate Bond ETF (BJSM)
This ETF targets high-yield corporate bonds maturing in December 2022, functioning like a bullet bond with a fixed maturity. As it approaches its maturity date, the fund's yield, duration, and total risk decline, culminating in the return of capital. It provides a practical way to access a diverse pool of US high-yield bonds with a clear end date, making it suitable for building bond ladders.
AdvisorShares Peritus High Yield ETF (HYLD)
This actively managed fund aims to generate high current income from a portfolio mainly comprising junk bonds, loans, and select stocks. It seeks to produce capital appreciation but can be concentrated in specific sectors, increasing risk. HYLD can also hold inverse or leveraged ETFs as part of its strategy. The fund’s higher expenses and lower liquidity are considerations for investors.
VanEck Vectors Emerging Markets High Yield Bond ETF (HYEM)
HYEM tracks an index of high-yield corporate debt issued from emerging market economies. Holding around 350 bonds mainly issued in dollars, the fund offers exposure to countries like Brazil and the Philippines. It tends to have lower yields and less interest rate risk compared to longer-dated portfolios, but may face wider spreads, liquidity issues, and higher costs.
