IHYF Profile
The Invesco High Yield Bond Factor ETF is an actively managed exchange-traded fund designed to provide investors with exposure to high-yield, below-investment grade fixed-income securities. The fund's primary objective is to deliver attractive returns through a diversified portfolio of high-yield bonds. Under normal market conditions, the ETF allocates at least 80% of its net assets, plus any borrowings for investment purposes, to high-yield securities. These include bonds that are rated below investment grade, as well as derivatives and other instruments that exhibit similar economic characteristics to these securities.
In addition to high-yield bonds, the fund has the flexibility to invest up to 20% of its net assets in U.S. Treasury and agency securities. This allocation to government securities provides a buffer against the volatility typically associated with high-yield investments. The inclusion of U.S. Treasury and agency securities enhances the fund's credit quality and liquidity profile, allowing it to balance risk and return effectively.
The fund also has the capability to invest up to 10% of its net assets in collateralized debt obligations (CDOs). CDOs are structured financial products backed by a pool of underlying assets such as loans or bonds, and they can provide additional yield opportunities. The use of CDOs allows the fund to diversify its holdings further and potentially capture higher returns, though it also introduces an additional layer of risk that the fund's management team must carefully navigate.
Overall, the Invesco High Yield Bond Factor ETF leverages an active management approach to seek out high-yield investment opportunities while maintaining flexibility through its allocation strategies. This includes investments in lower-rated bonds, government securities, and CDOs, all aimed at achieving a balanced and potentially higher return for investors willing to accept the inherent risks of high-yield investments.
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