ETF Research and Analysis

by Phillip Yoo
Suitability
PowerShares Fundamental High Yield Corporate Bond Portfolio PHB is a distinctive offering. It avoids the lowest credit-quality bonds and weights its holdings according to fundamental measures of the issuers’ size. But these   Read more 

Bull Case

BB rated bonds, which account for more than half of the portfolio, have historically offered attractive risk-adjusted returns.
The fund excludes the lowest credit-quality bonds.
The RAFI weighting approach reduces the fund's exposure to the most heavily indebted issuers.  Read more 

Bear Case

The fund's weighting approach is a bit arbitrary--it uses metrics that do not directly reflect credit quality or expected returns. This approach also skews the portfolio toward less liquid securities, which can be more expensive to trade.
The fund has lagged its benchmark by more than the amount of its expense ratio.
There are cheaper alternatives. Read more 

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