Pioneer High Income Trust Common (PHT)

AMatMFO

I'm looking for opinions about this bond ETF:
Pioneer High Income Trust Common (PHT)
http://cef.morningstar.com/quote?t=PHT&region=USA

Returns:
http://performance.morningstar.com/funds/cef/total-returns.action?t=PHT&region=usa&culture=en-US

This fund's returns look great in the past 1, 3, 5 and 10 years. It took a hit during the 2007 (-13.49%) and 2008 (-33.42%), but the performance was not too bad in its own category (rank: 21 and 60 respectively). It's performance was off the charts in 2009: 105.92% vs. 78.41% for its category.

Why can't this bond fund be considered a great fund in the ETF universe and also, in general, all of the mutual fund universe?
Do you have any other ETFs or mutual funds that are comparable to this bond fund and why are they better than this one?

Thanks.

Vert

This isn't an ETF, it's a closed-end fund. ETF's will trade at approximately the net asset value of the underlying assets. Closed-end funds like this will trade like stocks, meaning they may sell at a discount or at a premium to the net underlying assets. This makes them more volatile.

Another factor that makes them more volatile is that many closed-end funds use leverage, meaning they borrow money, invest the borrowed money, and expect to pay back the borrowed money out of the earnings. If their investments don't pay off, there aren't any earning to pay back the borrowing and they have to dip into their capital to do so. Generally, this means that they go up faster than equivalent etf's (or open-ended managed funds) and can also go down faster. In other words, they are riskier. According to Morningstar, PHT is leveraged at around 26%.

PHT is a junk bond fund. I don't follow those closely, but its equivalents would be other junk bond funds.

Hope this was helpful.

AMatMFO

Thanks Vert for the info and for pointing out the leverage used by PHT.