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AdvisorShares Peritus High Yield ETF (HYLD)

edited October 2013 in Fund Discussions
HYLD - has a higher interest rate 7.8% then other high yield corp bond funds like HYG 6.4%.

Looking at the charts and other info - it doesn't appear to be riskier then HYG.

Am I missing something?


  • It's an excellent fund: an actively managed etf, kinda expensive but worth it. The only other 10%+ ytd HY funds I'm aware of invest a lot further down in credit quality. It does, however, have more C-ish exposure than a lot of HY funds. It got creamed in Q3 2011, but held up really well in Q2 2013.

  • edited November 2013

    I too looked at this ETF a while back.

    Here's link to that thread: Peritus High Yield ETF HYLD

    A couple reservations...

    Volume is light, so HYLD is subject to wide spreads:


    Then, I'm not crazy about AdvisorShares. Some mediocre ETFs. And, shop does not strike me as share-holder friendly, given high ERs across the board. More of an asset gatherer.

    Here's how HYLD compares against other top rated high yield bond funds in MFO rating system, and (the somewhat mediocre) HYG...sorted by absolute return since Dec '10:


    Strong absolute returns for HYLD so far (just under 3 years old), but worst risk adjusted Martin Ratio in this group.

    Quick guess: this fund will decline at least 25% in a 2008-9 like market drawdown, more than half that of equities.
  • Charles,
    Thank you for that post - I'm not ready to invest yet and will hold onto your chart.
  • edited November 2013
    One more thing, which Mr. Studzinski warns us about. Timothy Gramatovich, Peritus Chief Investment Officer, and Ronald Heller, Peritus CEO & Senior Portfolio Manager, appear to have no skin in the game.

    Here from latest SAI:

    They are its co-founders and do not appear to own any shares of HYLD proper. Strange, don't you think?
  • edited November 2013
    For anyone looking at HYLD as a buy & hold, I wouldn't do it. But as a strategic investment for the past year (and who knows how much longer), it's been positioned well, has a very good 1y up-down capture, bond price is around par vs. above par for most HY funds, and liquidity at a volume of 80k is not really a problem. (Don't look at bid-ask when the market's closed ... the predators skew those percentages higher.) It's in a sweet spot in this particular market, with all its weirdness.

    HYLD had a mediocre 2012, so definitely bears watching and avoiding during a credit crisis. I own quite a bit of it, but have an exit plan.
  • Reply to @AndyJ: On the liquidity question, the bid-ask of HYLD at this moment, during trading, is 52.10/ 52.13, or 0.06%. Bid-ask range is frequently skewed and not representative when the market's closed.
  • Reply to @AndyJ: Much better.
  • Reply to @Charles: Just noticed that the mgrs did a fairly extreme portfolio makeover in the last month, a major credit quality upgrade: 80% is now B or better (13% in the C's and 7% unrated). Of the 8 HY funds I'm more or less keeping up with, it went from 7th to 2nd on credit quality.

    Makes me wonder what they think is coming up.
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