Goldman Sachs High-Yield ETF Boosts Dividends Amid Rising Rates

Investors in high-yield corporate bonds are seeing a notable uplift in income opportunities as the Goldman Sachs Access High-Yield Corporate Bond ETF (GHYB) announced a $0.319 per-share distribution for May 2025, marking its highest monthly payout in over a year. The ETF’s dividend surge, paired with a robust 7.31% forward yield and a low expense ratio, positions it as a compelling income play—but one that requires careful scrutiny of its risk profile.

Dividend Surge Reflects Underlying Momentum

The May distribution represents a 14.8% jump from April’s $0.270 and a 31.8% rise from March’s $0.242. While fluctuations are typical for high-yield bond funds, the upward trend aligns with broader market conditions. Yields on high-yield bonds have risen as the Federal Reserve’s pause in rate hikes has stabilized pricing, while issuers in sectors like energy and healthcare have bolstered cash flows.

The ETF’s annualized forward yield of 7.31% (calculated using its May 2 close of $44.19) is particularly attractive compared to the 10-year Treasury yield of 4.3%. However, this yield comes with trade-offs.

A Low-Cost Structure, But Risks Linger

GHYB’s 0.15% expense ratio—among the lowest in its category—helps maximize net returns for investors. This competitive cost structure, combined with its focus on liquid, non-investment-grade bonds, has allowed the ETF to outperform broader high-yield benchmarks like the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), which carries a 0.45% expense ratio.

Yet, investors should note the portfolio’s 4.79-year average maturity, which leaves it moderately exposed to interest rate shifts. A sudden spike in rates could compress bond prices, even as dividends remain steady. Additionally, the fund’s 912 holdings include issuers like Carnival Corp and Medline Borrower LP—companies with strong liquidity but still susceptible to economic downturns.

A Strategic Play for Income Seekers

Managed by Goldman Sachs Asset Management’s Fixed Income team, GHYB uses a representative sampling approach to mirror its custom index, which prioritizes bonds with improving credit metrics. This strategy has kept default rates in the portfolio below the sector average. As of late 2024, the fund’s top 10 holdings accounted for just 5.8% of assets, reflecting a diversified approach.

The ETF’s $38.7 billion in assets under management (as of 2024) also underscores its institutional credibility, though retail investors should remember that high-yield bonds typically carry higher volatility than investment-grade alternatives.

Conclusion: A High-Yield Win, But Not Without Caveats

GHYB’s May distribution highlights its ability to capitalize on a recovering high-yield market, offering investors a 7.31% yield with minimal fees. Its focus on credit-improving issuers and liquidity screens reduces—but does not eliminate—default risk.

However, the ETF’s success hinges on the Federal Reserve’s rate trajectory and corporate earnings resilience. Should the Fed resume hikes or economic growth falter, the fund’s price could face headwinds. For now, though, its consistent dividend growth and low cost make it a solid option for risk-tolerant income seekers, particularly those willing to accept moderate volatility for above-average yields.

Investors should pair this holding with a broader bond portfolio or cash reserves to mitigate risks. As always, the 7.31% yield is a powerful lure—but one best pursued with a long-term horizon.