macro

HYG Premium Income ETF

The iShares HYG Premium Income+ ETF (HYGW) is rated avoid as a macro trade. Across five oil and Fed scenarios, it returns +1.25% in euros over six months, below euro cash (+1.51%) and plain HYG (+2.31%). Analysis expects the Fed to hike about 44 bp over the next year against the 83 bp priced on 13 October, because the oil shock is a one-off price jump. Weekly ATM calls give away most of the rally that the view implies, while credit spreads at 3.27% (21 October) leave little tightening room. If the fund wants high-yield exposure to this view, a EUR-hedged high-yield ETF (+2.67%, an estimate) is a better option, kept to 5% of NAV (€1,015), though its lead over unhedged HYG is lost if the priced hike path falls below approx. 69 bp.

Varun Vats

Macro Analyst

9 Nov 2026