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This Is One of the Top Bond ETFs of the Past Decade

BY | ETF Database
10:01 am ET 08/03/26 | 17 VIEWS
Advisors and experienced investors know that whether its individual bonds or bond ETFs, fixed income investing is a long-term pursuit. In most cases, bonds just aren’t going to deliver short- or medium-term results comparable to riskier assets.That’s part of the trade-off investors commit to with bonds. However, they do gains the benefits of diversification, income, and perhaps some downside protection when equities falter. None of that means market participants should accept subpar fixed income returns. Fortunately, some bond ETFs have established track records of impressive long-term performances relative to the asset class at large. One of the members of that group is the WisdomTree Interest Rate Hedged High Yield Bond Fund (HYZD C). HYZD, which turns 13 years old in December, is a bond ETF meriting closer examination because, as its name implies, it’s an interest rate hedged strategy. Put another way, ETFs such as HYZD are designed to thrive when Treasury yields move higher.HYZD History Speaks For ItselfWith an effective duration of just 0.21 years, HYZD is right for the current fixed income climate, but that doesn’t mean its long-term potential is diminished. Historical data confirm this ETF is a long-term winner. According to Y Charts data, just nine bond ETFs outperformed HYZD over the 10 years ending June 30. Applying some scrutiny to those rankings is worth it because several of the top-performing funds are convertible bond ETFs – a segment of the bond realm that’s highly correlated to equities because convertible bonds convert to stock. Translation: HYZD’s 10-year run is all the more impressive when considering the ETF isn’t as highly correlated to stocks as are some of the ETFs that beat it over that span. Over the past five years, just six bond ETFs beat HYZD, according to Y Charts. Again, that group is comprised largely of funds holding bonds that are highly correlated to equities. Bottom line: HYZD delivered the goods both in terms of performance and providing investors with credible inflation protection. “The ten best-performing bond ETFs over the last ten years successfully beat inflation during that timespan. By contrast, investing $10,000 into a benchmark bond index such as the Bloomberg US Aggregate index netted a total return of just 16.56% over the last ten years, or 1.54% on an annualized basis, which fell short of beating inflation over the last decade,” according to Y Charts. For more news, information, and analysis, visit the Modern Alpha Content Hub.Disclosures _This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional. _ WisdomTree is an independent company, unaffiliated with VettaFi | ETF Trends. WisdomTree has not been involved with the preparation of the content supplied by VettaFi | ETF Trends. It does not guarantee, or assume any responsibility for its content.

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