Invesco Fundamental High Yield Corporate Bond ETF May Offer Only 5% in 2021

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The Invesco Fundamental High Yield Corporate Bond (PHB) ETF has only risen 3.4% this year and could end the year with a return of less than 5% to investors.

PHB’s performance in 2021 was poor

The Invesco Fundamental High Yield Corporate Bond (PHB) ETF is a fund designed to provide investors with broad exposure to the High Yield / Junk Bond ETF category of the market. This is a smart beta ETF that has been around since 2007.

PHB is managed by Invesco and the fund currently has over $ 1 billion in assets under management, making it one of the largest ETFs among high yield / junk bond ETFs. Before fees and expenses, the Invesco Fundamental High Yield Corporate Bond ETF seeks to match the performance of the RAFI Bonds US High Yield 1-10 Index.

At the same time, the RAFI Bonds US High Yield 1-10 index is made up of bonds denominated in US dollars registered with the United States Securities and Exchange Commission. Bonds are issued by public companies listed on a major US stock exchange.

ETF PHB chart. Source: FXEMPIRE

Despite its popularity, PHB has not performed well since the start of the year. The fund has only added 3.44% to its value since the start of the year. Over the past 12 months, the Invesco Fundamental High Yield Corporate Bond ETF has only gained 6.77%, underperforming several other funds in the industry.

PHB could deliver less than 5% in 2021

As a result of PHB’s performance since the start of the year, the fund’s annual returns in 2021 could be less than 5%. Over the past month, the value of PHB has only increased 0.60%. It has 0.50% annual operating expenses, making it one of the most expensive funds in the smart ETF space. The PHB fund currently has a 12 month dividend yield of 3.47%.

If PHB maintains its current level of performance, then it could drop below 5% before the end of the year. As of this writing, the PHB is trading at $ 19.55, up 0.23% since the US market opened earlier today.


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