The FM High Yield 100 ETF is a passive product designed to track the price and yield performance of the Bloomberg US High Yield Top 100 Quality Screened Equal Weighted Index. It builds its exposure mainly around issuers of US dollar denominated high yield corporate bonds that meet size and liquidity requirements.

It suits investors who want monthly distributions but also want to consider issuer size and liquidity criteria, rather than relying on the broad high yield bond market.

The ETF is managed by FM Investments using a passive (index tracking) approach.

The fund holds a sample of the index constituents and seeks to follow the price and yield movements of the index. For its target bonds, it first considers the bonds of large high yield issuers, selects securities using criteria such as credit characteristics, coupon, and issuance date, and uses equal weighting to ease concentration.

• Considers large issuers and liquidity conditions together
• Eases concentration in individual issuers through equal weighting

Assets under management (AUM) stand at $15.5M, and the total expense ratio is 0.39% per year.

Because holdings data is difficult to verify from the metadata provided alone, top holdings are not shown. Trading liquidity and the cost structure should be checked separately before buying.

High yield bond returns are sensitive to interest rate levels, the economic outlook, issuers' financial conditions, and changes in credit spreads. An index design focused on issuer size and liquidity is an approach intended to reduce the risk of individual defaults, but when credit risk widens, both prices and distribution capacity can come under pressure.

This product targets demand for a rules-based approach to the high yield bond market. However, as a new product with a limited track record, its stability in fund flows and trading conditions is an additional factor to verify. If market stress rises, bond liquidity and bid-ask spreads can change.

Its hallmark is rules-based exposure that uses large issuers and liquidity criteria, but the credit, interest rate, and trading risks of high yield bonds need to be monitored continuously.

The LQD ETF shown in the table focuses on investment grade corporate bonds, while the USHY ETF and HYG ETF focus on broad high yield corporate bond exposure. The USIG ETF covers investment grade corporate bonds, so the nature of its credit risk differs from that of the ZTOP ETF, and the SPHY ETF is a comparison option that captures the high yield market broadly. Because these products differ in fees, asset size, and tracking method, it is appropriate to compare credit risk and trading conditions together, not just the distribution level.

Before investing, start from the fact that this product is a high yield bond ETF, and check changes in credit risk, the interest rate environment, and trading liquidity together, rather than focusing on the sustainability of the monthly distribution. Its track record as a new product and its order methods are also factors to consider when deciding on a holding period.

High yield bond prices can swing sharply when credit risk rises or liquidity dries up. Interest rate changes, deterioration in issuers' finances, broad risk aversion in the market, and geopolitical variables can affect net asset value and trading prices, so investors should approach the product assuming a possibility of loss.

The FM High Yield 100 ETF can be considered by investors who want high yield bond exposure that uses large issuers and liquidity criteria. However, rather than judging it by the monthly distribution alone, it is more appropriate to examine credit risk, interest rate sensitivity, trading conditions, and cost differences from similar ETFs together.