Invest in Corporate Bonds with BondBloxx ETFs
Why invest in corporate bonds?
U.S. investment grade and high yield corporate bonds, categories of the credit market, can offer attractive yields and return potential, given the strong fundamentals and resilient earnings of many U.S. corporations.
But picking individual corporate bonds isn’t easy or efficient for most investors.
With BondBloxx ETFs, investors looking to boost income can target specific credit rating categories, from BBB investment grade bonds to CCC high yield bonds. Plus, our ETFs hold a diversified portfolio of bonds, reducing the risk of picking individual securities.
Check out the following investment ideas and our suite of credit rating ETFs—and prepare to take full credit for the attractive yields they capture.
Investment ideas
Look beyond broad corporate bond exposures and get more precise.
Tap into the consistently higher income of BBB corporate bonds
BBB rated corporate bonds are a persistent outperformer within the U.S. investment grade universe,1 driven by their historically higher average coupon income compared to broad U.S. corporate indices.2 BondBloxx ETFs target more precise maturities of 1-5, 5-10, 10+ years within the BBB universe, enabling investors to better manage portfolio duration and implement active views with a single fund.
Aim for the highest yields in U.S. fixed income markets
It’s time to let investors in on a secret: high yield bonds have historically generated compelling returns with lower, not higher, volatility than equities. In fact, over the past 10 years, high yield has been about half as volatile as the S&P 500.3 Focusing on specific high yield credit quality segments – like BB, B or CCC ratings – can help investors get targeted exposures for specific needs.
Make BB bonds the “plus” in your core+ portfolio with BondBloxx’s XBB ETF. With today’s higher average coupon income and resilient corporate fundamentals, BB bonds may enhance fixed income performance versus the US Aggregate Index.
Seek the highest yield in U.S. fixed income markets with CCC bonds using BondBloxx’s XCCC ETF. A key strength of XCCC is its broad diversification by industry and by issuer, significantly reducing the risk of investing in individual CCC rated bonds.
The full line-up of BondBloxx Corporate Bond ETFs
| Fund Name | Ticker | Expense Ratio | Yield-To-Maturity | 30-Day SEC Yield |
|---|---|---|---|---|
| BondBloxx BBB Rated 1-5 Year Corporate Bond ETF | BBBS | 0.19% | 4.73% | 4.32% |
| BondBloxx BBB Rated 5-10 Year Corporate Bond ETF | BBBI | 0.19% | 5.03% | 4.65% |
| BondBloxx BBB Rated 10+ Year Corporate Bond ETF | BBBL | 0.19% | 5.56% | 5.27% |
| BondBloxx BB Rated USD High Yield Corporate Bond ETF | XBB | 0.20% | 6.17% | 5.66% |
| BondBloxx B Rated USD High Yield Corporate Bond ETF | XB | 0.30% | 7.39% | 6.85% |
| BondBloxx CCC Rated USD High Yield Corporate Bond ETF | XCCC | 0.40% | 10.92% | 11.09% |
| BondBloxx USD High Yield Bond Consumer Cyclicals Sector ETF | XHYC | 0.35% | 6.92% | 6.21% |
| BondBloxx USD High Yield Bond Consumer Non-Cyclicals Sector ETF | XHYD | 0.35% | 6.30% | 5.86% |
| BondBloxx USD High Yield Bond Industrial Sector ETF | XHYI | 0.35% | 6.85% | 6.45% |
| BondBloxx USD High Yield Bond Energy Sector ETF | XHYE | 0.35% | 7.01% | 6.23% |
| BondBloxx USD High Yield Bond Financial & REIT Sector ETF | XHYF | 0.35% | 6.86% | 6.20% |
| BondBloxx USD High Yield Bond Healthcare Sector ETF | XHYH | 0.35% | 7.02% | 6.39% |
| BondBloxx USD High Yield Bond Telecom, Media & Technology Sector ETF | XHYT | 0.35% | 8.33% | 7.89% |
| BondBloxx USD High Yield Bond Sector Rotation ETF | HYSA | 0.55% | 7.14% | 6.93% |
BondBloxx, Bloomberg, as of 10/15/2024. 30-Day SEC Yield is as of 09/30/2024.30-Day SEC Yield represents net investment income earned by the fund over the 30-Day period, expressed as an annual percent age rate based on the fund’s share price at the end of the 30-Day period. The performance quoted represents past performance and does not guarantee future results. The investment return and principal will fluctuate. Investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. Returns less than one year are not annualized. Shares of the Fund are bought and sold at market price (not NAV) and are not individually redeemed from a Fund. For the most recent month-end performance, please call 800.896.5089 or visit the Fund’s website at www.bondbloxxetf.com. For standardized performance, click on the fund’s ticker above. *Net expense ratio shown. BondBloxx Investment Management has contractually agreed to waive a portion of its management fees through 2026. Please see the Fund’s prospectus for additional details.
1 Source: Bloomberg, as of 8/31/24. Based on the ICE BofA BBB US Corporate Index compared to the ICE BofA US Broad Market Index, the ICE BofA US Treasury Index, the Bloomberg US MBS Index, and the Bloomberg US ABS Index, comparing 1-, 3-, 5- and 10-year annualized returns.
2 Source: Bloomberg, as of 8/31/24. Based on the ICE BofA BBB US Corporate Index compared to the ICE BofA US Corporate Index, the ICE BofA AAA US Corporate Index, the ICE BofA AA US Corporate Index, and the ICE BofA Single-A US Corporate Index, comparing the average yield to maturity over the last 10 years.
3 Source: As of 12/31/23, the 10-year average standard deviation of returns for the S&P 500 Index was 17% while the ICE BofA U.S. High Yield Index was 9%. We expect equities to continue to exhibit higher volatility compared to high yield bonds.
Definitions
30-Day SEC Yield: This yield represents net investment income earned by the Fund over the 30-Day period, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-Day period.
Yield-to-worst: A measure of the lowest possible yield that can be received on a bond that fully operates within the terms of its contract without defaulting.
DISCLOSURE
Carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus or, if available, the summary prospectus, which may be obtained by visiting www.bondbloxxetf.com. Read the prospectus and summary prospectus carefully before investing.
This document does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations. To the extent that the reader has any questions regarding the applicability of any specific issue discussed above to their specific portfolio or situation, prospective investors are encouraged to contact BondBloxx at 800.896.5089 or info@bondbloxxetf.com or consult with the professional advisor of their choosing.
Bond ratings are grades given to bonds that indicate their credit quality as determined by private independent ratings services, such as Standard & Poor’s, Moody’s and Fitch. These firms evaluate a bond issuer’s financial strength or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which are the highest grade, to ‘D’, which is the lowest grade. According to the Standard & Poor’s rating agency, investment grade bonds range from AAA to BBB-. Investment grade bonds have ratings of BBB- or above. High yield bonds have ratings of BB+ and below. BBB-rated bonds are typically subject to greater risk of downgrade than other investment grade bonds, especially during an economic downturn or substantial period of rising interest rates. Any downgrade of such bonds would relegate such bonds from the investment grade universe to the high yield (or “junk” bond) universe, which could negatively affect their liquidity and their value.
There are risks associated with investing, including possible loss of principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Investing in mortgage- and asset -backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on. BBB-rated bonds are typically subject to greater risk of downgrade than other investment grade bonds, especially during an economic downturn or substantial period of rising interest rates. Any downgrade of such bonds would relegate such bonds from the investment grade universe to the high yield (or “junk” bond) universe, which could negatively affect their liquidity and their value.
Certain information contained herein constitutes “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events, results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Nothing contained herein may be relied upon as a guarantee, promise, assurance or a representation as to the future.
Distributor: Foreside Fund Services, LLC.
