Family Management Corp.’s David Schawel isn’t so sure. Aside from short-term, opportunistic trades—such as a sudden spread widening between the different rating tiers—it’s unclear what the use-case would be for most junk-bond investors, he said.
“I don’t know if there’s enough players who look at high-yield this closely that would be buying an ETF,” said Schawel, the firm’s chief investment officer. “There’s high-yield buyers and ETF buyers. I’m not sure if the overlap is that huge.”
All three planned BondBloxx funds will track ICE BofA indices that use a composite rating from Moody’s Investors Services Inc., S&P Global Ratings and Fitch Ratings Inc., and they’ll cap exposure to any given issuer at 2%, according to the filing.
Tickers and management fees for the ETFs are not yet listed.
This article was provided by Bloomberg News.