Exchange-traded funds (ETFs) themselves are viewed as revolutionary in the world of financial services, and some ETFs really embody that revolutionary theme. One area where ETFs have particularly excelled is increasing accessibility to asset classes that were once hard to reach for ordinary investors. That is exactly what the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has done. Just a few days shy of its tenth birthday, HYG is home to nearly $18.3 billion in assets under management. That makes it the largest high-yield corporate bond ETF trading in the U.S. and the sixth largest bond ETF of any type.

With over $18 billion in assets, it is clear that HYG has found a following among institutional investors. A big reason for that following is that HYG is cheaper to trade than individual junk bonds. The average bid-ask spread on HYG is just a single basis point, but the average spread on an individual junk bond is 50 basis points, according to data from BlackRock, Inc. (BLK). (See also: Overview of the iShares High Yield Bond ETF.)

One way of looking at that scenario is that HYG and other heavily traded junk bond ETFs have enhanced liquidity in a corner of the bond market often known for not being liquid. There is a robust secondary market for HYG, which bolsters the ETF's liquidity during times of increased high-yield market volatility such as the 2013 taper tantrum and the 2015 mini-crisis in high-yield. During that 2015 event, HYG traded $4.3 billion on Dec. 11, then a record for intraday trading in a corporate bond ETF, according to issuer data.

Data also indicate that HYG trades more frequently than even the most heavily traded of its more than 1,000 holdings. There are almost 50 firms that provide liquidity to HYG throughout an average trading session. The ETF tracks the Markit iBoxx USD Liquid High Yield Index and has displayed minimal tracking error to that benchmark over its 10 years on the market. (See also: Traders Turn to Corporate Bonds for Yield in 2017.)

HYG's liquidity and tight spreads highlight the advantages that the ETF offers to institutional investors, but that crowd is only part of the ETF's following. In fact, about half of HYG investors are retail investors. That makes sense when considering the ETF debuted in 2007, just before U.S. interest rates slid and prior to the Federal Reserve unveiling several iterations of quantitative easing. HYG sports a 30-day SEC yield of 5.2 percent, which is likely a selling point among income-starved retail investors. HYG has an effective duration of 3.8 years. (See also: Is It Time to Get Out of High-Yield Bond ETFs?)