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Investment Approach BlackRock Corporate High Yield Fund, Inc.’s (HYT) (the ‘Trust’) primary investment objective is to provide shareholders with current income. The Trust’s secondary investment objective is to provide shareholders with capital appreciation. The Trust seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its assets in domestic and foreign high yield securities, including high yield bonds (commonly referred to as ‘junk’ bonds), corporate loans, convertible debt securities and preferred securities which are below investment grade quality. The Trust may invest directly in such securities or synthetically through the use of derivatives. No assurance can be given that the Trust’s investment objective will be achieved. A SOURCE OF HIGH INCOME High yield bonds have historically provided higher levels of income than core bonds* FLEXIBILITY FOR CHANGING MARKETS The fund seeks to prudently balance income, risk and return through diverse markets PROVEN RECORD OF INCOME AND RETURNS The fund has navigated diverse market conditions while delivering an attractive yield * High yield bonds typically have greater risk than core bonds Next: Previous:
as of Mar 31, 2022 Name Weight (%) TRANSDIGM INC 1.75 ALLIANT HOLDINGS INTERMEDIATE LLC 1.24 CLARIOS GLOBAL LP 1.03 CARNIVAL CORP 0.95 CENTENE CORPORATION 0.84 Name Weight (%) CCO HOLDINGS LLC 0.82 ALLIED UNIVERSAL HOLDCO LLC 0.80 CLEAR CHANNEL OUTDOOR HOLDINGS INC. 0.80 VENTURE GLOBAL CALCASIEU PASS LLC 0.76 VERSCEND HOLDING CORP 0.76
10. Vanguard Emerging Markets Government Bond (VWOB)
If you want to find yield with a low-cost ETF that invests in emerging markets bonds, you'll like what you see in Vanguard's VWOB. The fund tracks the Bloomberg USD Emerging Markets Government RIC Capped Index. The index consists of about 1,000 emerging markets bonds, with an average length of 6.4 years, and credit quality mostly below investment grade.
The SEC yield for VWOB was 3.80% as of May 2021, and the expense ratio is 0.25%.
Growth of $10,000 as of 07/31/2021
The chart begins on the Fund’s inception date of 12/31/1998 . Based on a hypothetical Class A share investment of $10,000 on 12/31/1998 without sales charge and includes the reinvestment of all distributions.
5. Alerian MLP (AMLP)
MLP funds invest in master limited partnerships, which often focus on energy-related industries. MLP performance can be volatile, and their structure as partnerships is more complex than those of corporations, which are owed as stocks. If you're considering buying these funds, you should do more homework than usual.
The expense ratios of MLP funds can be high and sometimes hard to understand. These funds are likely best if you're looking for high yields, often as high as 7% or more. The expense ratio is 0.85%, which is low for an MLP fund.
Seeks to maximize return per level of risk through comprehensive risk management. May be appropriate as a higher-yielding satellite position within properly diversified portfolios.
Advantages of High-Yield Bonds
Generally, investors in high-yield bonds can expect at least 150 to 300 basis points in additional yield compared to investment-grade bonds at any given time. In actual practice, the gain over investment-grade bonds is lower because there will be more defaults. Mutual funds and exchange traded funds (ETFs) provide ways to tap into these higher yields without the undue risk of investing in just one issuer’s junk bonds.
Higher Expected Returns
While high-yield bonds suffer from the negative "junk bond" image, they actually have higher returns than investment-grade bonds over most long holding periods. For example, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) had an average annual total return of 6.44% between the beginning of 2010 and the end of 2019.
During that time, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) returned an average of 5.93% per year. This result is in accord with modern portfolio theory (MPT), which holds that investors must be compensated for higher risk with higher expected returns.
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