ETF spotlight on the iShares Global ex USD High Yield Corporate Bond ETF (NYSEArca: HYXU), part of an ongoing series.
Assets: $121.4 million
Objective: The iShares Global ex USD High Yield Corporate Bond fund tries to reflect the performance of the the Markit iBoxx Global Developed Markets ex-US High Yield Index, which is comprised of high yield, speculative grade corporate bonds denominated in euros, British pound sterling and Canadian dollars.
Holdings: Top holdings include Banco Popolare 1/28/2016 0.9%, Lafarge SA 6/26/2017 0.8%, Commerzbank 3/16/2021 0.7%, Heidelbergcement 1/31/2017 0.7% and Wind Acquisition Finance 2/15/2018 0.7%.
What You Should Know:
- BlackRock’s iShares sponsors the fund.
- HYXU has a 0.40% expense ratio.
- The fund has 388 components, and the top ten holdings make up 7.3% of the overall portfolio.
- Sector allocations include industrials 21.3%, financials 18.7%, consumer goods 14.1%, consuemr staples 9.8%, telecom 8.1%, basic materials 4.9%, technology 2.8%, health care 4.5%, utilities 4.4% and oil & gas 1.6%.
- Currency exposure includes euro 82.9%, pound sterling 8.0% and Canadian dollar 3.5%.
- Country weights include France 14.3%, Italy 11.9%, U.K. 11.4%, Netherlands 11.2%, Germany 10.7%, Luxembourg 10.4%, Spain 6.3%, Canada 5.5%, Ireland 2.7% and Portugal 2.0%.
- Credit quality include BBB 2.5%, BB 53.8%, B 25.3%, below B 3.% and not rate 15.0%.
- The ETF has an effective duration of 2.95 years – duration is a measure of a bonds sensitivity to change sin interest rate, and a 1% increase in rates could translate to a 2.95% dip in the bond ETF’s price.
- The fund has a 3.42% 30-day SEC yield.
- HYXU is up 1.2% over the past month, up 1.3% year-to-date and up 14.3% over the past year.
- The ETF is 4.1% above its 200-day exponential moving average.
- Since the ETF holds foreign-currency-denominated bonds, the ETF is subject to currency risks.
- A stronger U.S. dollar, or weaker euro, pound and Canadian dollar, would mean that the fund’s assets are worth less in USD terms.
Next page: The latest news
The Latest News:
- High-yield corporate bonds, which typically move along with stocks, have been holding up, despite the recent volatility in the equities market.
- The premium investors demand for high-yield corporate bonds in euros dipped to a six-year low against government debt as a lack of new issuance push up prices, reports John Glover for Bloomberg.
- “We haven’t seen any significant issuance and there’s still demand for yield from institutional investors,” Craig Veysey, head of fixed income at Sanlam Private Investments Ltd., said in the article. “A lot of issuance has already been done, company balance sheets are relatively strong, so there isn’t necessarily the need to issue.”
- Companies refinanced and raised high-yield bond sales last year, capitalizing on the record low rates.
iShares Global ex USD High Yield Corporate Bond ETF
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.