Schwab Asset Management has launched a high-yield-bond ETF to provide investors with access to the U.S. dollar dominated high yield corporate bond market, Schwab announced Monday.
The ETF, which will begin trading on or about July 11, can serve as a diversifier for investors looking to take advantage of the newly favorable bond market, Schwab said.
The Schwab High Yield Bond ETF (NYSE Arca: SCYB) will have an expense ratio of 0.10%. It is priced in line with the lowest fee ETFs in the Morningstar High Yield Bond category.
“The Schwab High Yield Bond ETF is a timely addition to our lineup of fixed income ETFs as investors continue to seek out low-cost, straightforward products that help diversify their portfolios,” Nicohl Bogan, director of product strategy and development at Schwab Asset Management, said in a statement. “SCYB is a compelling offering for investors seeking potentially higher-yielding fixed income with the inherent benefits of an ETF, including tax efficiency and ease of trading.”
The goal of the Schwab High Yield Bond ETF is to track as closely as possible, before fees and expenses, the total return of the ICE BofA US Cash Pay High Yield Constrained Index, Schwab said. “More specifically, the ETF seeks to provide broad-based exposure to the U.S. high yield corporate bond market with a focus on liquidity, while attempting to mitigate investment risk through security selection and issuer diversification,” the firm said.