MYHD targets high-yield corporate bonds maturing around 2030, offering a defined-maturity approach to junk bond investing. This structure lets investors lock in current high yields while knowing exactly when their principal returns, assuming no defaults.
How It Works
The fund holds a diversified basket of below-investment-grade corporate bonds all maturing in or near 2030, then distributes proceeds and liquidates. Unlike traditional high-yield funds that maintain constant duration by rolling bonds, MYHD's duration naturally shortens each year. The portfolio likely emphasizes BB and B-rated credits over CCC paper to balance yield with default risk.
Key Features
- Target maturity structure eliminates reinvestment risk — you know your endpoint
- Zero expense ratio makes it cheaper than any active high-yield fund
- Built-in de-risking as bonds approach maturity and duration declines
Risks
- Default risk could erode 10-20% of principal if recession hits before 2030
- No ability to extend duration if rates fall — you're locked into today's yields
- Limited liquidity given zero AUM — wide bid-ask spreads likely
Who Should Own This
Perfect for investors wanting high-yield exposure with a specific time horizon — think pre-retirees planning for 2030 expenses or parents with kids starting college that year. Also suits those worried about rate volatility in perpetual high-yield funds but willing to accept credit risk for 6-7% yields.