Absolute Advisers Adds BlackRock's HYT ETF to Its Alternative Investment Approach

What happened

According to an SEC filing dated April 22, Absolute Investment Advisers, LLC, initiated a new position in the BlackRock Corporate High Yield Fund (NYSE:HYT) by purchasing 1,191,864 shares. The estimated transaction value, based on the average closing price for the quarter, was approximately $10.44 million. The value of the new position at quarter-end was $10.15 million, reflecting both the trade and price movements during the period.

What else to know

• The new HYT stake represents 1.19% of Absolute Investment Advisers’ 13F assets under management following the filing.
• Top holdings after the quarter:
  • Granite Construction Inc. 3.250% convertible note: $24.6 million (2.9% of AUM)
  • MKS Inc. 1.250% convertible note: $20.2 million (2.28% of AUM)
  • Patrick Industries 1.750% convertible note: $18.9 million (2.2% of AUM)
  • OSI Systems 2.250% convertible note: $18.45 million (2.16% of AUM)
  • Tetra Tech 2.250% convertible bond: $18.4 million (2.16% of AUM)
• As of April 21, 2026, HYT shares were priced at $8.67, up 4.82% on a total return basis over one year, but lagging the S&P 500 by 33.8 percentage points.
• HYT’s current dividend yield is 10.8%, with shares priced at 12.1% below their 52-week high.

ETF overview

ETF snapshot

• Offers exposure to high-yield fixed-income securities, including corporate bonds, loans, convertible debt, and preferred securities primarily rated below investment grade.
• Generates income by investing in a diversified portfolio of high-yield bonds and related instruments, seeking to deliver attractive risk-adjusted returns through active credit selection and portfolio management.
• Targets institutional and retail investors seeking enhanced yield and diversification through access to domestic and international high-yield credit markets.

BlackRock Corporate High Yield Fund is a closed-end fund managed by BlackRock Advisors, LLC, focusing on high-yield fixed-income investments worldwide. The fund leverages BlackRock's credit research and portfolio management expertise to identify opportunities in below investment grade corporate debt. Its strategy aims to provide shareholders with a high level of current income and total return by actively managing a diversified portfolio across sectors and geographies.

What this transaction means for investors

It’s important to view this position within the context of Absolute Advisers’ stated investment mission, which is to “provide investment strategies with unique sources of risk and return that exhibit low sensitivity to traditional stocks and bonds.” This strategy is evident in the group’s top five holdings, which are all corporate bonds, as well as in its new position in BlackRock’s HYT ETF.

Corporate debt can be a good tool for portfolio diversification as well as income, as these notes generate yields that are far above the standard dividend you’ll find on the market. Of course, this level of income isn’t without risk. The HYT ETF invests at least 80% of its assets in high-yield bonds (often called “junk bonds,”) corporate loans, convertible debt securities, and preferred securities that are below investment grade quality.

The ETF’s high yield also comes at a steep price: Its 2.35% expense ratio is extremely high, which will cut into the overall capital appreciation you’ll see from this investment.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BlackRock Corporate High Yield Fund. The Motley Fool has a disclosure policy.