BKHY Offers an Efficient Way to Access High Yield Markets

Core Insights - The article emphasizes the importance of diversification in fixed income portfolios, particularly in the context of potential Federal Reserve rate cuts and leadership changes [1] - High yield bonds are highlighted as a key component for building a diversified fixed income portfolio, offering both sector diversification and significant income [1] Group 1: High Yield Bonds - High yield bonds are increasingly relied upon for diversification and income, especially in a low bond default environment [1] - Various ETFs provide different strategies for gaining exposure to high yield bonds, necessitating due diligence from advisors and investors [2] Group 2: BNY Mellon High Yield ETF (BKHY) - BKHY aims to blend income and capital appreciation through a systematic investment process focused on the Bloomberg US Corporate High Yield Total Return Index [3][4] - The fund employs a proprietary credit model to identify opportunities in fallen angels and undervalued bonds, while minimizing exposure to overvalued securities for better downside risk management [4] - As of July 31, 2025, nearly 90% of BKHY's portfolio consists of bonds rated B or BB, which are less likely to default compared to lower-rated junk bonds [4] - BKHY currently offers a competitive 30-day subsidized yield of 6.85% as of September 5, 2025, alongside its diversification benefits [4]