Invesco Fundamental High Yield Corporate Bond ETF Might Deliver Only 5% in 2021

The Invesco Fundamental High Yield Corporate Bond ETF (PHB) has only gone up by 3.4% this year and could end the year delivering less than 5% in returns to investors.

PHB’s Performance in 2021 Has Been Poor

The Invesco Fundamental High Yield Corporate Bond ETF (PHB) is a fund designed to provide investors with broad exposure to the market’s High-Yield/Junk Bond ETFs category. It is a smart beta ETF that has been around since 2007.

PHB is managed by Invesco and the fund currently has more than $1 billion in assets under management, making it one of the larger ETFs in the High-Yield/Junk Bond ETFs. Before fees and expenses, the Invesco Fundamental High Yield Corporate Bond ETF seeks to match the performance of the RAFI Bonds US High Yield 1-10 Index.

Meanwhile, the RAFI Bonds US High Yield 1-10 Index is made up of US dollar-denominated bonds registered with the United States Securities and Exchange Commission. The bonds are issued by public companies listed on a major US stock exchange.

Despite its popularity, PHB hasn’t performed excellently since the start of the year. The fund has added only 3.44% to its value since the start of the year. Over the past 12 months, the Invesco Fundamental High Yield Corporate Bond ETF has only grown by 6.77%, underperforming various other funds in the sector.

PHB Could Deliver Less Than 5% in 2021

Following PHB’s performance since the start of the year, the fund’s annual returns in 2021 could be less than 5%. Over the past month, PHB’s value has only grown by 0.60%. It has annual operating expenses of 0.50%, making it one of the most expensive funds in the smart ETF space. The PHB fund currently has a 12-month trailing dividend yield of 3.47%.

If PHB continues with its current level of performance, then it could fall short of the 5% mark before the end of the year. At the time of writing, PHB is trading at $19.55, up by 0.23% since the US market opened earlier today.