High Yield ETFs: HYG

Investors seeking current income from their portfolio should consider a high yield ETF such as iShares iBoxx $ High Yield Corporate Bond Fund (Amex: HYG).

HYG tracks an index of 50 high-yield corporate bonds with an effective duration of a little over 5 years and a weighted average coupon of 8.36% as of April 14. The $600 million fund has an S&P rating of B- and an expense ratio of 0.5%.

HYG currently trades at a slight premium to NAV and has for most of its history. The current distribution yield is 7.92% and the average yield to maturity is 9.54%. All iShares fixed income ETFs pay dividends on a monthly basis.

Top holdings include debt issued by Freeport McMoran (NYSE: FCX), SunGard Data Systems and Crown Americas Corporation.

Note that HYG is based on a passive index and high-yield securities have unique risks. Check with your financial advisor before investing.

For more information, see the iShares website.

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