SHYG
iShares 0-5 Year High Yield Corporate Bond ETF
Mentions (24Hr)
0.00% Today
Reddit Posts
Why do bond fund ETF prices move so much with stock market
Mentions
Wanted to get some opinions. I'm 32 married with a kid. We have 154000 in stocks, 90k in roth ira, 57k in traditional ira, 20k in 401k, 38k in savings. Currently, the savings is 50% cash, 25% SGOL (gold), and 25% SHYG (high yield short term corporate bonds). I was thinking of taking the savings to 50% cash, 20% gold, 20% SHYG, and 10% VTI just to get a little extra return. I understand I also have the risk of it going down more, but portfolio visualizer is showing the wort year of 11.5%. What would you do?
I run the gamut, total bonds (BND), aggregate bonds (SCHZ), HY corp. (SHYG), Tips (VTIP). Some are to reduce volatility, others for income
SHYG. Short term high yield corporate bonds. Pays a monthly dividend, yearly dividend around 7%. Very low price volatility.
True, but the yields also factor this in. Not worth it for those who aren't in high tax brackets. I think something like SHYG or another shorter term bond ETF is a good way to get better than HYSA rates with very low risk.
Yes I’d put some in high yield savings making 4.75-5% and the rest in bond ETFs that pay anywhere from 3-7% yield Things like JEPI FALN FLOT HYDB SHYG BINC
To all the expert here would an ETF be an option like SGOV or SHYG?
50% SCHD. 25% SHYG. 25% VYMI and then leverage 1x on NQ futures when $comp above 30 day SMA.
I’m in SHYG, it’s gone down 9%, but yields 6%+. My dividends have more than made up for losses over the last three years.
I'll have to check it out. I'm really interested in seeing the discussions. I have some SHYG and watch it daily. It really does behave like a stock. Basically I was looking to hold some cash (emergency or otherwise) in an investment account where I could yield better than a HYSA and be liquid. Looking purely for interest in this use case. Similar taxes on returns and willing to take a little bit of a risk in the blend. Right now I have a mix of SGOV, JEPQ, SHYG, and BRLN (new fund). I'm averaging around 8.5% return in dividends. Overall I'm up a few hundred bucks in NAV gain plus receiving the dividends but that can all change with a bit of a market downturn so I watch it all very closely. JEPQ just paid me out $100 today. Others are coming in a few days.
High yield corporate bonds (SHYG) are highly correlated with equities.
I think it's a great time to get into short duration funds like SGOV (0-3 mo Treasuries), and I'm starting to add to SHV (< 1 yr Treasuries). SHV will be affected slightly by future rate increases, but still net a profit, and be well positioned if rates flatten in the second half. I've also started to add to SHYG (0-5 yr corp), but that's more speculative, with high current yields but more vulnerable to rates and recession. First time I've used bonds in a while.
because they're too busy shitting out 7% yields for the price to recover. There's some decay built into a lot of these products, that's a feature not a bug. If you dropped $50,000 in SHYG as a "low risk" investment a decade ago, yeah it sucks that your per-share price dropped from $50 at listing in 2013 to $49.14 today, but your money *really* made you ~$48k in yield, assuming reinvestment just sitting there, even though your original principal atrophied 10% or ~$10. Roughly doubling your money over 10 years is *extraordinarily good* for a fairly conservative play and handily outpaced inflation. A 10 year note at that point was like 1.8%. Like a $9700 return instead of ~$40k net.
Clearly you haven't met a fixed income dividend-focused ETF like SHYG before
Yeah SHYG should return more than BND. Defaults do eat into the YTM and should be kept in mind. But they shouldn't eat the whole spread. https://stockcharts.com/freecharts/perf.php?SPY,HYG,BND&p=6
BND has 3.96% SEC yield and 4.6% portfolio yield to maturity (minus 0.03% expenses). I think you are looking at its TTM yield. SHYG has 7.65% SEC yield and 7.28% portfolio YTM (minus 0.30% expenses). SHYG is a junk bond fund, so you will see pretty high correlation to stocks.
Not sure where you are looking, on the iShares website I see the following for SHYG (as of 31 October): Cumulative 5Y price return: 11.35% (2.17% annualised) Cumulative 5Y total return: 11.74% (2.24% annualised) Total return is what matters, which includes that SHYG pays a $0.15-20 distribution every month.
Read the prospectus for investments you are looking to invest in: https://www.ishares.com/us/products/258100/SHYG Check the performance tab under both growth and distribution. The main gain over time on bonds is not the ticket price but the dividends received over time adding up. SHYG looks like it pays 15-20 cents per month for every share owned like clockwork this year. Things are referred to as fixed income assets when they return a fixed income to you on a schedule. This bond will return that 15-20 cents to you every month on the first week of the month. My advice would be to also check out SPHY as it is accomplishing largely the same objective at a third of the expense ratio.
Corperate bonds are highly correlated to stocks. You want government bonds if you want them less correlated to stocks. Bond funds still have risk premiums compared to say a money market fund, so when interest rates change the value of your bonds held in the fund change as well. This short term price movement is the loss you’re seeing in SHYG (are you considering the return with distributions reinvested or just share price change?) When it comes to bond funds you should look at the average duration of bonds and how much yield that bond gives. Over the average duration of a bond in a bond fund you’ll gain the approximately the average yield in returns. Seeking yield, especially with corporate bonds, means you’re buying a product that comes with a lot of risk and you’re seeing how that risk can go wrong with the current market. Don’t seek yield and go for short term government only bond funds if you want to take a little risk to try and beat a money market fund.
If you're going with bonds, maybe get rid of anything long term or higher risk like SHYG. Although you could assume housing costs may correlate with the market, and so you can justify having some risk as long as you only sell it buy a house. What you have right now is extremely conservative and you wouldn't want to hold that more than 2 years.
SPHY HYLB USHY track the basic index and should be good. You might go short duration SHYL SHYG for an even faster recovery, though the broad high yield index has an effective duration of ~4 years which isn't that long. A 2024 maturing fund IBHD BSJO could also match your use case well.
Two options come to mind. An important difference is that one is liquid and you could withdraw the money at any time, whereas the other would need to be locked in for at least one year. The first option is a high-yield bond fund. As you may know, bonds are generally safer investments than stocks, but high-yield bonds are a relatively risky type of bond. You could buy shares of a fund like [USHY](https://www.ishares.com/us/products/291299/ishares-broad-usd-high-yield-corporate-bond-etf) or [SPHY](https://www.ssga.com/us/en/individual/etfs/funds/spdr-portfolio-high-yield-bond-etf-sphy). Or, if you wanted to limit exposure to interest rate risk, you could buy shares of [SHYG](https://www.ishares.com/us/products/258100/ishares-05-year-high-yield-corporate-bond-etf). To learn more about the risk-return properties of bonds, you could read [this](https://github.com/investindex/Risk#understanding-bonds-and-their-risks). The second option is I-bonds. This is a well-established but less orthodox type of investment, because you can't buy it through a brokerage account. You buy them on a US government website, treasurydirect dot gov. They require a one-year commitment of funds, whereas you can cash out anytime from a bond fund like SHYG. But unlike a bond fund, there is no risk of loss. [This recent post](https://www.reddit.com/r/personalfinance/comments/qprqpy/ibond_questions_answered/) explained them well.
High-yield corporate bonds or "junk" bonds inherently have some risks, but something like SHYG would give you \~$.20/share each month trading around $45 a share right now. If the market tanks, though, the share price will most assuredly plummet along with it.
I don’t like money markets for parked cash as yields are terrible. I often look to short term bonds. SLQD (high quality corp bonds), FSHIX (short munis). SHYG (high yield Corp bonds). For cash that may be held longer (say more than a year) I love PONAX, a bit of a go anywhere bond fund with an amazing track record. My CU has a rate > 1% so I keep some idle cash there too as a super safe choice for one layer.