iShares Lists New High-Yield ETFs
April 4th 2012 at 1:55pm by Tom Lydon
iShares, the exchange traded fund arm of BlackRock, launched two new bond ETFs this week, with a plan of two more to debut later this month. The new funds center on high-yield securities representing developed and emerging markets.
“As investors have broadened their search for new income sources globally, high yield has emerged as one of the market’s more significant opportunities,” Darek Wojnar, Head of U.S. iShares Product Development and Management at BlackRock, said. [Special Report: Navigating Higher Rates with Bond ETFs]
“Market conditions – in particular, an unprecedented low rate environment – continue to make it vital for investors of all kinds to identify new sources of yield and income,” Wojnar said. [Treasury ETFs Suffer Worse Loss Since 2010]
Van Eck this week introduced an international high-yield bond ETF. [Global Junk Bond ETF]
The new iShares ETFs will premiere on the BATS exchange, the third largest exchange — iShares is the only provider that has launched funds there. [How Changes in Bond Rates Affect Fixed-Income ETFs]
The first funds to debut are:
- iShares Emerging Markets High Yield Bond Fund (BATS: EMHY) A first to market product, this ETF provides access to high yield bonds denominated in USD and includes a 65% allocation to sovereign bonds and 35% to corporate issues.
- iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU) Also a first to market product, this fund offers access to developed international non-U.S. denominated high yield bonds, which are denominated in euros, pound sterling and Canadian dollars. The fund’s highest country allocations are France (15 percent), the United Kingdom (15 percent), Germany (14 percent), and the Netherlands (12 percent).
The funds scheduled to list April 5 are:
- iShares Global High Yield Corporate Bond Fund (BATS: GHYG) Also a first to market product, GHYG provides complete global high yield in one trade, via developed international corporate bonds denominated in the USD, euros, the pound sterling, and the Canadian dollar. Based on the country of the issuer, the fund is allocated 69 percent to the U.S., 16 percent to Europe, 4 percent to the United Kingdom, and 3 percent to Canada.
- iShares Morningstar Multi-Asset Income Index Fund (BATS: IYLD) An ETF of iShares ETFs that delivers income with a diversified, managed approach. The fund is allocated 60 percent to fixed income, 20 percent to equity and 20 percent to alternative income sources.
Tisha Guerrero contributed to this article.
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