Pair AHYB and KORP to Increase Corporate Bond Income

American Century Select High Yield ETF (AHYB) and American Century Diversified Corporate Bond ETF (KORP) are actively managed funds that provide access to corporate bond income. The 12-month distribution rates were 5.99% for AHYB and 5.08% for KORP as of June 30.

AHYB targets higher-yield corporate debt with three- to 10-year maturities. The fund applies a bottom-up process that screens issuers for cash flow, credit quality and valuation and takes inflation and interest-rate trends into account. The expense ratio is 45 basis points.

KORP focuses on the lower end of investment-grade corporate debt with an intended duration of roughly five to seven years. The fund seeks steadier income through a broader, more conservative corporate bond mix. The expense ratio is 29 basis points.

Performance and yield figures from American Century show AHYB returned 7.2% over five years and had a 6.65% yield to maturity as of June 30. KORP returned 5.3% over three years and had a 6.1% yield to maturity on the same date. Both funds’ multi-year returns exceeded their ETF category averages, according to American Century data.

AHYB’s concentration in high-yield issues exposes it to higher credit risk and greater sensitivity to economic conditions. KORP’s focus on lower-tier investment-grade debt is intended to reduce credit risk relative to high-yield holdings. The differing maturity targets create distinct interest-rate exposure profiles.

The 12-month distribution rates reflect cash payouts over the prior year and do not guarantee future distributions. Yields to maturity are projections based on current holdings and market prices and can change as holdings are traded or market yields move. Both ETFs trade intraday and provide diversification across multiple corporate issuers.

The data on distribution rates, yields and returns are current as of June 30, per American Century.