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ETF Specialist

Are Junk-Bond ETFs on Track?

Common measures of tracking performance don't tell the full story.

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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.

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John Gabriel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.