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USHY ETF offers cheapest US high-yield bond exposure but risks rise if spreads widen beyond 350 bps.

Market News
08 Jun 2026
24/7 Wall Street
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Neutral
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The iShares Broad USD High Yield Corporate Bond ETF (USHY) is currently the most cost-effective way to invest in US high-yield bonds, with a low expense ratio of 0.08%. It has delivered about 8% total return over the past year, mainly from coupon income. However, the fund faces risk if the option-adjusted spread (OAS) on US high-yield bonds widens beyond 350 basis points, which could cause significant price drops. The fund's heavy exposure to lower-rated CCC bonds adds risk, especially if default rates rise. Investors should monitor spread levels and default rates closely in the coming year to manage risk.

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