Pick BlackRock ETF over TRS, says trader

Friday, September 23, 2016

HYG is currently without shares to borrow, but one trader says that it makes sense for unit holders to lend out shares rather than go for a TRS trade

 

TAGS: High yield bonds

Comment by: Pasquale Capasso. Posted 7 years ago [2016-09-27 16:59:26]

Sure but it depends on how you calculate NAV on TRS vs ETFs. HYG use bid-prices to calculate NAV, like the majority of FI ETFs. This is why they will always have a substantial premium. Is TRS NAV calculated using bid-prices or mid-prices?

Comment by: Anonymous. Posted 7 years ago [2016-09-26 16:04:59]

But the ETF also trades @ a premium & You have entry/exit B/O costs on the ETF + tracking error on the ETF. While the Prem. to NAV on TRS is less than the premium the etf is trading at.

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