PIMCO 0-5 Year High Yield Corporate Bond Index Exchange-Traded Fund Price & Performance (HYS)

Credit spreads between high-yield bonds and U.S. Treasuries remain historically narrow at 2.8%, but rising delinquency rates on credit cards and auto loans suggest potential widening. Investors are also watching Federal Reserve policies, which, despite recent easing, leave rates significantly higher than three years ago.1

As the new tax year approaches, high-yielding ETFs like iShares MSCI EM Latin America and WisdomTree Europe SmallCap Dividend provide UK investors tax-free income opportunities. These funds balance income generation with long-term growth, helping investors avoid pitfalls like dividend traps while diversifying portfolios.2

Bond ETFs, such as the Strategy Shares Gold Enhanced Yield ETF and iShares Convertible Bond ETF, are becoming popular for their affordability and ability to spread risk. These funds offer liquidity, constant maturity, and tradability, making them a practical choice for both income and portfolio diversification.3