Pick BlackRock ETF over TRS, says trader

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


Register Free

Sign up to this free service allowing you access to selected news and feature articles plus a weekly email news bulletin

Already a registered user? Click here to login.


This is an online only service and is available free of charge. Creditflux reserves the right to terminate access to the site at any time.

TAGS: High yield bonds

Comment by: Pasquale Capasso. Posted 1 year 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 1 year 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.