Are Junk-Bond ETFs on Track?
Common measures of tracking performance don't tell the full story.
The two most popular junk-bond exchange-traded funds, iShares iBoxx $ High Yield Corporate Bond (HYG) and SPDR Barclays High Yield Bond (JNK), represent nearly three fourths of total assets invested in the high-yield bond ETF Morningstar Category. Given the increased attention that the category as a whole, and these two ETFs in particular, have received recently, it's a good time to pull back the curtain and take a closer look.
An important point that has come up time and again in this rivalry is their relative tracking performance. On the surface, there seems to be a large discrepancy between the two ETFs in how well they track their respective benchmark indexes.
John Gabriel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.