SPHY
SPDR Portfolio High Yield Bond
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I personally invest in equities and bonds only because of their fundamental value proposition. My primary goal is growth, and interest rates are low relative to expected equity growth, so I'm weighted 90% equity and 10% bonds. Equities produce everything. Ultimately, it's labor that produces value. You need to make assets move for them to get something out of them, and equities are the only thing that does that. I invest in a global market index (VT) because it closely resembles the global value of equities. For the long term, i dont believe strongly in any company, industry, or country (not enough to expect trajectories wont change), but I do believe humans will crack on and continue to progress as a whole one way or another. The value of bonds is contractually defined. They will pay $X dollars over Y years unless the guarentor goes bankrupt. No other asset class has the level of calculable certainty. I invest in a US-based currency bond index fund (BND) because it's the currency I trade in, and I'm not interested in currency risk. BND is as diversified as I can get without taking on risk of other currencies. I also use USFR and GOVT for tax efficiencies and safety associated with US treasuries, and I have a small position in SPHY as BND lacks junk bonds, and it helps balance my weighting back toward corporate bonds given my use of treasury funds. I dont invest in static assets or currencies as they dont have a value-growth proposition. When you invest in other assets, it's pure speculation they will be worth more later. I think they can be valuable as wealth preservers (albeit with a lot of volitility), but my main investment goals are growth.
Try SPHY with a .05 expense ratio and a 7.5% yield if you wanna do bonds.
>But, I still have 50k sitting in the hysa getting 3.4%. I’m tempted to put that all into the NASDAQ IMHO, Best is to go for SPHY or TLT or keep it HYSA. When deep trouble on streets, fear all along with community, you can dip your hand in QQQ Or if QQQ drops 5% move 5% of your cash to QQQ and if it dips 10%, then move 10% of cash to QQQ (at that time have no fear of losing another 15% or 20% as you are going to DCA) I do the same (may be biased)!
You can diversify with SPHY and TLT.
SPHY held up really well during liberation day
Open up a Roth and stick that money in a junk bond etf like SPHY
Keep in mind that higher yield = higher risk. SPHY holds corporate bonds which are more risky than US Treasuries (SGOV).
I knew of all of these except SPHY. Can you talk more about it? I already have BND in my IRA & considering SGOV in my taxable (to allocate purely on T-Bills)..why should I buy SPHY? I see its expense ratio is 0.05% & has a 7% yield. Am I missing something, why isn't SPHY talked about more often since at first glance, is beats SGOV? Surely, there are discrepancies in underlying holdings regardless - because the term "Bond" is vague and can refer to many things.
Can you add SPHY and FALN to this list? Also, I wouldn’t judge a fund based on 1 year returns
A dividend stock fund and/or a high-yield bond fund are both viable options (eg, VYM and SPHY). Note that bond interest is generally taxed as income.
>find the right home for with the best returns and least risk Then this is not that. If you are hoping for 8% returns just buy a stock market index fund and hold for the long term. Or if you want to approach that yield from an income investment, buy a corporate high yield ETF like SPHY. Current yield is around 7.5% but it's got many diversified holdings, not just a single sketchy unrated one in Mauritius.
>If that is somehow right, what aspects of the bond make it worth so little? Current issue high yield corporate bonds currently pay a coupon in the 7-8% range, that's why. 4.4% is Treasury territory. So the bond you mention isn't desirable at all. Why take on the risk of an individual issue junk bond only to reap the same interest as a US Gov't bond? For example, look at the SPHY ETF with yield around 7.5% based on current NAV.
This is definitely not without risk in the case of a market downturn. As one of your holdings, you could consider SPHY, a HY bond fund that currently has a 7.7% yield, alongside a stock dividend fund like VYM. Bear in mind that a fall in asset prices could lead you to be caught with your pants down.
Just another storm to ride out. If you are diversified, then not all that much to worry about. I used to be a domestic bond only person. But I diversified into funds like BNDX, and SPHY to compliment BND. And a mix of CD's can't hurt either. Commodities will also be important under the Trump administration since there's a lot of unpredictability.
30% here. I am 50 and semi retired. I have a mix of SPAB, SPHY, abd BNDX.
You plan ahead, lol, and hedge by "VOO, IAU, TLT, SPHY (or whatever mix) and chill," and then "DCA 4 Lyfe."
was mostly in bonds/bills already. sold longer held positions (months-years) in early March / late Feb though. Like EPD, GLW (@ 50!). Also higher yield type assets (CLO, HY bond, Pimco HY) - JAAA, PAAA, SPHY. PHK Though got a very very minor burn from entering in small position on Int'l Value stocks though...but dumped remaining just before Friday's bigly down (which means < 2% loss on those positions rather then 7%+ now?) < 1% overall in equity mutual funds. And just keeping that for old time's sake.... now...what to do about my < 5% gold position?
That seems fine if your goal is a more moderate portfolio. Depending on how much customization you can do, I would consider something like SPHY, which currently has a yield of 7.6%. VYM is a great option for value/dividend stock investing. You could devote a modest portion to CMDY as an inflation hedge.
Continually buying my ETFs; SPLG, VGT, SCHD and SPHY. I missed out on the 2022 dip and will not do that again.
I'm probably late,I'm retired and 72.5, with Rmd coming. Which of these stocks might suffer the most and i'd be better off without; KMI VTI O VTV SCHD SPHY BTI SO MO T MSFT NEM AAPL
sgov holds short term treasury, so you can't have a -ve return if Fed raises rates. But instrument holding long duration bonds can including for SPHY ( usually they hedge risks, but .. ) Just look at 2022 performance of SPHY The current environment is very fluid. It is anyone's guess if Fed will reduce rates or increase rates. short duration treasuries based instruments are the safest bet, so I would choose sgov if I had to choose for my account.
Look into $SPHY. Like all investments it comes with risk but it could fit what you’re looking for
I DCA(dollar cost average) twice weekly into ETFs (SPLG, VGT, SCHD, SPHY). Putting ~$700/wk in. I use Fidelity auto-invest……set it and forget it.
I would get BLV rather than TLT b/c of the latter's lower expense ratio and slightly higher yield. You could also consider SPHY (high-yield corp bond, 7.6% yield). A commodities ETF like CMDY is another option as an inflation hedge. I wouldn't abandon the stock market entirely though - in fact now might be a great buying opportunity.
Thank you for these suggestions! I am in VYM/SCHD for dividends + VGK for international, also got some JEPI/JEPQ, all in a taxable account (get income now versus later in an IRA). Definitely keeping money in a MM and SGOV. I will look more into these. SPHY looks interesting, nice yield, little risk, kind of like TLT.
It depends on any number of factors, so use your best judgement. I recommend a longer-term plan rather than just a few trades. Also consider tax efficiency (if money is in taxable account). But some quick options to consider include: \* VYM - high-div US index fund \* CMDY - commodities index fund & inflation hedge \* VEA, VXUS, or other non-US/international fund \* alternative assets like bitcoin, gold, etc. \* high-yield bond fund like SPHY \* TIPS fund like SCHP I also advise keeping some money where it is now, in a MM fund while the yield is high, and in case you need it for an unexpected expense. Again, disclaimers that this isn't personalized advice and your situation may warrant a different strategy.
BRK.B moves with the markets, it was down 2% today like everything else. when the market tanked early November, QQQ and BRK.B were almost 1:1 relative price correlation. Recession hedge is bonds. $PULS barely moved today, $TLT may be very positive. $SPHY barely moved today as well. all of these pay monthly interest.
I’ve liquidated some riskier individual stocks and put that money into SCHD and SPLG. Will continue weekly buys into SPLG, SCHD, SPHY and VGT. Not scared…….yet 😆
*slightly* higher? SGOV. Still pretty safe, and is just under 5% currently. More risk? You're getting into corpo [junk bonds](https://www.investopedia.com/terms/j/junkbond.asp) probably. SPHY or similar are all fairly stable (so long as the economy/interest rates are stable) and pays around 7%. Beyond that, I'd just got S&P.
Sure. I've been monitoring new issues on Fidelity's site for a couple of years. They are callable, and I've got issues with call dates between '25-'28. It's a bit like a ladder, only I'm fine holding til maturity at those rates. Even today, there are 6-6.5% new issues with A to BBB ratings. For funds, look at JPIE or JAAA, and don't reject high yield funds like SPHY or JBBB. There are many others.
I have a variety of individual corporate bonds with coupon between 6-6.7%. Also tickers SPHY, JBBB, JAAA, JEPI, JEPQ, SPYI, PFFA. Cash is in FZDXX money market fund.
>The last 5 years have been some of the most brutal that bonds have every experienced. Depends on which one. Funds based on short term government bonds have done ok the last few years (SGOV, TBLL, etc). SPHY and some of the high interest bond funds have been alright too, when adjusted for total return. I-bonds have given fairly lucrative returns for a few years too.
VGSH VGIT VGLT (short int long bonds) SPIB SPHY (corporate int and high yield bonds) VMBS (mortgage backed securities) My bond allocation is divided evenly between all six. They all pay every month. Some perform better in certain conditions than others. I like the outlook of all of them and plan to hold them all indefinitely. In my 401k I have just FXNAX (Fidelity MF AGG / BND equivalent) because no other real bond choices.
I tend to do 40% in VOO, 10% in FTEC, 10% in FDIS, 5-10% in both Small and Mid-Cap ETFs (VOT and VB) and then everything else is technology because I know that the inside and out. I scrapped dividend stocks because I’m not sure where I’ll be able to write off long-term investment gains down the road in life (I’m 29) and don’t want to pay taxes on those dividends now. With that being said, a set of corporate bonds may be wise to make things more conservative (SPHY).
First thing’s first: Max out your 401K. I personally do 40% S&P ETF (VOO), 7.5% Mid-Cap ETF (VOT), 5% Small-Cap (VB), 10% Consumer Discretionary ETF (FDIS), 10% Technology ETF (FTEC), 10% Government Bond ETF (SPHY), and then 10% or so in single stocks, of which almost all are Mid-Caps. 10% FTEC is probably sketchy in some people’s eyes because that’s considered risky, but this is my personal account in addition to my 401K. I probably should have some international stock ETFs, but I don’t know enough about it and my 401K has plenty of them natively. I’m 29 for reference. Keep in mind, everyone’s situation is different. Biggest thing I would recommend is investing a small portion everyday, whether it’s $1 or $100. Of course, if the stock market tanks, then drop that theory and increase the antes haha.
Thanks for your response. From what I understand, credit spreads are, "The difference in yield between two bonds with similar maturities but different credit qualities." This reminds me of The Big Short because - my understanding - many junk bonds were underwritten by major credit agencies at higher ratings than they should have been, after they were re-packaged as Mortage Backed Securities (MBS). Hypothetically, even if the economy were to go south, what would the overall impact be to a fund such as SPHY? Could it default completely? What's interesting is, from my understanding, SPHY came into existence in 2012, so, unfortunately, we can't look at what impact the 2008 collapse had (or would have had) on this fund. I need to do more research, clearly, so, thanks again for your response.
I've been a SPHY investor for many years and the index composition has 5 pieces of Caesar's Debt at 4.5-8% and 6 pieces of MGM debt at 4.5-7%. I've noticed a pooling of casino debt in the composition when I've read the regular prospectus' over the years. I've been very happy with SPHY as an investment, but would not be keen on investing in the stocks of these companies, especially due to how many high yield debts they have in this index as well as the general negative business environment for old style casino/hotels.
I’ve heard one investor using junk bonds to potentially identify under valued companies; I’d rather do a fund like ANGL, or SPHY, or SCYB instead of something THIS dangerously high
Plotting my degen strategy for when I hit my boring ass VOO goal. How’s it sound fam? 25/25/25/25 TQQQ, SPHY, JEPI, IBIT
Is SPYI pretty stable though I was in some higher yield ETFs and kept loosing NAV and dividends didn't keep up. To me looking at SPHY it looks like it's trend has been going up for the most part over the years even though it is corporate bonds so that is why I chose it over SGOV I had been parking the premiums in.
My return should technically be more than 10% because the premiums are earning 7% annualized in SPHY where I am parking the premiums and the 128k is earning 5% annualized in the MMA while it is parked backing up my CSPs. The 10% is only the premiums earned on the Cash tied up. Since not all of the contracts are for a 4 month period I could roll those that expire earlier for more premium that quarter bettering my return. But I understand the need to hold S&P and I do, S&P ETFs make up more than 2/3rds of my portfolio total portfolio in my IRA. I will be retiring in about 15 years so I wanted to start slow and learn to see if I could provide myself with some kind of income from options and not have to touch my stocks and ETFS as much in retirement. I just didn't know if this type of return would be what could be expected with options as being good long term if repeatable.
SPHY -11% over the last 10 years.
Boutta buy 1000 shares of SPHY, 50 of SGOV, take the leverage out as a loan, and buy a nice bottle of wine.
**My 401k loan hits tomorrow, 10k into SPHY bond thingies, and 10k into SPY 600 leaps**
**Spy touches ATH so I can move 100 of my port/profits into SPHY and then borrow against it to buy a house** 
If these calls print I’m buying 1,000 shares of SPHY and letting em drip into VOO, boom, cash farm confirmed.
Convince me not to buy 500 shares of SPHY and forget about em for the next 35 years
I got you. Take 90-95% of your cash and park it in a high-dividend producing fund like SPHY (currently at 7.7% and has not lost much value over the past decade). Now take the remaining 5-10% of your funds and buy LEAPS on TQQQ, SOXL, and any other triple-leveraged funds you believe might have success in the near future. This will simulate the upside of being invested in a broad, successful tech market while completely protecting your account from losses past 5-10%. With careful management, your dividends will continue to allow you to make these call bets even if they fail in some years, and you can rebalance to 5-10% of your account and roll your options forward when they succeed. This uncorks potential upside without substantially risking your nest-egg.
SPHY. It's a corporate bond etf. It's relatively stable and pays nice dividends monthly. Reduces volatility while still providing returns.
Seconding SPHY, expense ratio is the lowest in class and returns are excellent. I wouldn't even consider selling shares of this, it just prints money every month.
It's true. I like high yield, and hold it in SPHY and other securities. It tends to move like an equity though, so it does not help to smooth out portfolio fluctuations, if that matters to you. High yield are usually shorter duration bonds too, so it recovers faster when interest rate risk strikes relative to other longer bonds
TBIL, TLT and some SPHY is my bond portfolio, averaging around 5% \~80% bonds for me as well, somewhere between 3 and 10 years from retirement depending on how my business outlooks go.
Got some SPHY shares and 10/18 and 1/17 calls. Hope so. 7.72% distribution yield ain’t bad either.
Why are you paying an extra 51bps over SPHY?
If you want consistent safe income bonds are the way to go. At your age it would not be a bad idea to also hold an index fund. I would recommend 50% in VT, and 50% in a mix of bonds or bond etfs. Some good bond etfs are BND and SPAB. SPTB is on the safer side, and SGOV is the safest. SPHY is on the riskier side but has a really nice yield.
I started buying bond funds in late 2022, then moved more aggressively to individual issues and more fund shares in late 2023. Bonds are 15% of my portfolio. I am focused on investment grade corporate, high yield, and some agency bonds. Some are callable between 2025 and 2028. For funds I'm using VCLT and SPHY. The rest are individual bonds. Now may be the last good time for a while. The best (so far) was October 2023. Of course, bond traders have been playing this guessing game for quite some time now! So who knows!
Parking my money in SPHY till this market gets ahold of itself. I've learned my lesson being ber-curious. But no chance I'm going bullish here.
SPAB or BND. SPHY if you want a higher yield higher risk option.
I love SPHY. Bought 150k, just drops a grand into my account every month. I then gamble away on poorly timed poots
Assuming you will buy VFV in a brokerage account, the simplest approach is to find the highest post-tax yielding, stable asset that you can purchase in the same account. Using a U.S. example, I would purchase U.S. Treasury bills either in an ETF (e.g. USFR, SGOV) or money market fund (e.g. FDLXX, SNSXX). These are exempt from state tax where I live. If I had a longer term DCA strategy, I would be constantly watching bond offerings with appropriate maturity dates. I would either use government agency bonds which are, again, exempt from state tax; or I would use corporate bonds. Right now is also a good time to consider new issue callable bonds with the highest yield, as these will likely be called when rates drop. Not a guarantee and this involves market timing, but I like the approach regardless. While a bit more risky, I also like high yield bond funds such as SPHY which has a mix of investment grade and below corporate bonds. I would not put the money into anything that tracked the actual equities market, and I would not use anything with an eroding NAV like QYLD and its ilk. Hopefully you can extrapolate from this U.S. based info and apply the ideas to Canadian options.
SGOV or TFLO are great "no risk" short term treasury ETF's. Buy them around the first of the month after they go ex-dividend. Want more yield go with something like SPHY or USHY for corporate bond ETF. They also pay dividends monthly. Want some opportunity for capital appreciation with income look at COWZ or SCHD for dividend paying stock ETF's
this is the right play, you just have to get the timing right. also ZROZ is the even greater potential gainer.... you just really have to know this market. holding TBIL right now which doesn't move as much, but pays nice. also holding SPHY, i was afraid when it hit $22 but it's at $23.5 now (this is a big move for a bond etf.... and you can pile cash into it)
I wouldn't even mess with a CD - 5% t-bills would be perfect for right now if he has savings he doesn't need access to. They're federal tax free, but he could plow the money into a ROTH if he's working so the state taxes would be off too. I would also suggest looking into high yield bonds - you can find reasonable ETFs like SPHY that yield around 8% right now - or 9+% when times are rougher. If interest rates are cut you'll see capital gains too - a relatively simple play. But honestly, it's mostly too late.
Stick for bonds until stocks correct and be patient while you gain some experience learning about market cycles. Look at the bond market right now - it crashed during all of 2023 while stocks have reached new ath’s. Now that bonds are bidding at a discount while stocks are overvalued, and while retail flows into stocks are at new highs as well, fund managers and pensions are taking profits in stocks and loading up on bonds. Meaning smart money is dumping stocks to retail investors who are selling their bond allocations at the bottom while buying overvalued stocks chasing the fomo stock rally. The fed has raised rates and as of now they are pausing. This could change and this is the risk you need to be researching. Historically, stocks see a correction after the first rate cut. All the media and news touting bullish rally and rate cuts will send markets up another 20% whatever is complete nonsense. Look into bond etfs - many pay dividends monthly and bonds are discounted rn which financial networks are completely ignoring. Investment & junk grade. LQD, HYG, JNK, AGG, ANGL, SPHY, VCLT, BND, BNDX (emerging market bonds), etc. Given the current economic data, global conflicts, and worldwide elections in 2024, this is not the year to dump all your money into stocks, especially heading into the US presidential election with stocks absurdly overvalued and chipmakers going vertical because of government subsidies fueling competition for global dominance in semiconductors. Keep your cash in a money market fund for the next year and slowly begin accumulating bond etfs routinely based on your risk tolerance. Preserve capital. Wait for a crash/correction. Buy assets when they’re discounted not overvalued. Cheers!
the 20 year bond chart appears to be pricing in a rate hike (https://finance.yahoo.com/chart/TLT) i'm in TLT, TBIL, ZROZ and SPHY to keep it spicy. i've held corp/muni bonds in the past but have never seen bond action like this before. i would not be surprised if the fed held rates for the rest of the year and did a hike in the near term, instead of any drops.
SPHY BKLN are only two i own.
Pay off loans first, or as quick as you can. They are a waste of your money. If I made that much money, I'd live in my car and save it all. Look for an index fund with low fees. I own one which covers the whole US stock market - from large caps to mid-cap to small caps. That way you have the safety of large stocks and the growth potential of the smaller caps. Put a little money in every month. You have enough time to recover from downturns; I would invest pretty aggressively, so that you can retire some day. Foreign stocks tend to be less reliable. I also invest in High Yield Bonds, which have risk but can pay large dividends. (ex: SPHY). Make sure their fees are as low as possible. Then retire outside the USA.
SPHY is current paying dividends of 7.28% corporate bonds are obviously not risk free but it has a 10-year performance of about 4.5%
Whenever a recession is approaching, the low grade bond prices always drop like a rock. The fear is some companies that issue junk status bonds will not survive the recession. But you don't see that happening. ETFs such as HYG SPHY and BKLN are doing quite well. The prices of those have been slammed hard a few months ago but completely recovered and then some.
Look at bonds - bonds are currently rallying off the lows after a substantial bear run and people who were short bonds have closed their shorts and gone long bonds. Stock indexes have basically chopped sideways for 2 years after a decade-long bull market from the GR lows followed by insane QE which is now slowly being reeled in by QT. If you’re worried about stocks correcting, the bond market is looking much more appealing. AGG, HYG, LQD, JNK, VCLT, TLT, SPHY, ANGL And understand the relationship between bond yields and bond prices.
Don’t start trading yet. With only $100 I’d buy and hold PFF, SPHY, ANGL, and KMI. Key word here HOLD. This way you have exposure across bond and stock markets with dividend income and some volatility with energy. Key point here is to sit back and watch how your holdings behave over time, especially when economic data released or policy is announced. You’ll also get a feel of emotional engagement. But in all honesty I would save my time and money and focus solely on my career if I could go back and start over. You’ll really need to trade through at least one, more realistically two, boom-bust cycles to grasp the repeating themes and attitudes that play out before, during, and after every rally, every crash. Do you see yourself trading into your 30s? 40s? Or do you see yourself in a different career? If you’re just getting started and really want to learn, then start by reading the terms from your broker and research every time you don’t understand until you can explain all of the terms you’ve agreed to a 5 year old. It will take a long time.
$SPHY is an example from my portfolio. Also $MFT
Put 1/4 in SPHY for 7.2% yield, 1/8 in AAPL, 1/8 in MSFT, 1/2 in VOO
...SPHY currently yielding \~9% annually in high-yield bonds (consider risk, not investment advice, see your doctor if it lasts more than 4 hours, etc., etc.)
USFR pays well over a 5% divvy (based off their recent monthly dividends, not YTD), and is focused on short term treasuries. Same for TBLL. They can go up and down more rapidly than some others based on rate changes, but as long as you're paying attention it's not a bad option. If you go into corporate bonds (and don't mind some junk bonds), SPHY is around a 7.5% yield. The problem with all of them (short term bonds, HYSA, etc.) is they're sensitive to rate changes. As long as you're on the ball/flexible, you can respond quickly and enjoy the profits while they last.
Only word of caution; if a bond is yielding much over 5-6%, there are greater risks (they are usually corporate bonds at that point). "Junk" bonds are usually higher APY to investors, but carry risk from companies that in economic downturns may not be able to repay. ETFs like SPHY do a decent job of balancing risk and safety but they are still a higher risk than say, SGOV, or "investment grade" bonds from corporations.
A Bond ETF pays you (usually monthly around the same time of the month). SPHY has been virtually the same price the entire time I have owned it but what it pays every month has continually increased. Last six months it has paid $0.14-to-0.15 per share on a price of only like $22-to-23. Basically would you exchange a $20 bill for a dime or two a month in income in perpetuity or until rates collapse. If yes, buy some, if no, you can pass on it.
Does a bond ETF award you interest as a dividend, or is the ETF price all you get? The historical SPHY chart looks very bad, so I presume there must be something I don’t understand.
From my own experience, when a recession hits, the first one to go down is the high yield bond funds. The bonds typically go down before stocks, and of all different types of bonds funds, high yield goes down first. (nobody gets HY bonds individually due to their risks) Personanlly I own SPHY & BKLN, but the weight is not that high.
What are the goals? Very low risk, just want cash? SGOV, TBLL Low risk, slightly better return? USFR. More risk, higher return? SPHY. If we are talking life savings, I'd do a mix; 30% SGOV/TBLL, 50+% USFR, 10-20% SPHY. If this is just trading money you are stashing feel free to be more risk-on. ...I am not a financial manager, do your own DD.
SPHY. Rock bottom expense ratio, insanely high yield. I sing it from the mountaintops every time I get.
Put like 20% of the gains in some high payment monthly dividend stocks like $SPHY and let it autoreinvest and every some often with your gains increase your position
My opinion...at 20 why would you want SPHY or any bond fund. Just be the 500 FXAIX.
SPHY has among the best yield and lowest expense ratio of HYCB funds. SPHY recently halved the Expense Ratio from 0.10% to 0.05% as well which has been nice. It’s the only fund of this class I would recommend.
If you are interested in high yield corporate bonds check out SPHY it has been doing great in the last few years.
To be honest, if I had just stayed in broad index funds or ETF's (VOO, VTI) I would have been at a much better place now. So I would suggest to at least put 80% of your investments in solid broad assets. Use the rest to try to find the next best stock but chances are you won't keep up with the S&P500. If you were older, a shift to some more value ETF's (SCHD, SPHY) and bonds would be appropriate, but when you're younger than 40 there is nothing wrong with being fully invested in VOO or VTI.
SPDR Portfolio High Yield Bond ETF (SPHY) - current yield: 7%. Beta: 0.92. BB and B rated bonds are 86.9% of holdings. There's your seven per cent. Not as safe as AAA rated bonds, obviously.
What are people who use TD using? I was using snvxx but I didn’t like the day or so for funds to settle as a mutual fund. Have my cash split now between SGOV and SPHY. better options?
If you believe in its long-term fundamentals, averaging down could be a good strategy especially if you see the dip a a temporary setback rather than a structural issue. Also, given that 50% of your portfolio is in JEPI, JEPQ and SPHY, perhaps evaluate the potential risks associated with those holdings and how the correlate with O.
Yes I have considered that which is why 50% of the portfolio is in JEPI, JEPQ, and SPHY which are low risk and low beta ETFs then O is about 7-8% of the portfolio and the rest is split between all of those numerous companies so that way they shouldn’t all fail at once. I wouldn’t feel comfortable having the smaller companies in here be anything more then 3% of the portfolio they are all about between 1-3% each of it right now.
I like SPHY, which as I write has a yield of 7%. But this is high yield ("junk") Bonds, which are not safe like AAA Bonds, and thus are pretty risky; how risky is the question. If you want more yield you pretty much have to take some risks, I reckon.
0.885 correlation roughly over the last 10 years, though if you look at calendar year returns on Morningstar, their are clear years where MNHYX can outperform SPHY and vice versa by pretty large margins largely dependent on industry holdings, and based off of the strategy, I believe MNHYX has better exposure. In any situation, I wouldn’t buy high yield bond funds for an income or bond component over the long run as I’ve said, If my portfolio was large enough though, I would buy individual bonds tho
I mean I just fundamentally disagree as that assumes no one can beat any equity or fixed income market, I mean you’re basically saying if ur long only, you can’t beat the market which has been proven wrong as these have outperformed by 150BP over the last 10 years. Also they don’t have the same risk profile, they pose less risk credit wise, for context they hold 50-100 issuers, so yes it is relatively concentrated, it is definitely not super concentrated and each of them has had distinct periods of outperformance and sometimes underperformance, so though correlation is obv positive, it is not highly correlated and has higher expected returns due to both risk being lower. I mean SPHY literally has 1900 bonds in its portfolio (less issuers, likely around 1000), it doesn’t make sense to assume that choosing 50 issuers with a different industry allocation, mostly, “highly correlated returns” are unlikely, though positive are ofc expected.
The contrarian opinion would say to look at SPHY. Expense ratio is low at 0.05%, the Beta is 0.92 which is pretty good. This is high yield bonds, however, which are considered risky. Yield is currently 6.89%, but that will change of course. The Yield from SCHD, to compare, is 3.44% at present, but their Beta is 0.81. I wanted to see some income from the huge bond market, and SPHY is where I landed. The price is under $23 at the moment, which is a good discount to their usual price. I once calculated that 10K would pay out about $725 / year in dividends. Do your own research, I don't guarantee good results from this ETF or any stock or fund!