Additionally, the iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF will track a similar index as iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG), except HYXE excludes oil and gas bonds, removing about 10% of the exposure of the parent iBoxx USD Liquid High Yield Index.
“This may be appealing to investors who are concerned about recent declines in oil prices and volatility in the energy sector,” according to BlackRock.
The speculative-grade debt market has experienced heightened volatility on growing concerns over the nascent shale oil industry’s ability to repay debt obligations after the plunge in energy prices. HYXE tries to remove the default risks by excluding exposure these indebted oil producers.
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Moreover, BlackRock is slashing fees on the iShares 0-5 Year Investment Grade Corporate Bond ETF (NasdaqGM: SLQD) and iShares Convertible Bond ETF (BATS: ICVT). SLQD’s expense ratio was lowered to 0.08% from 0.15%, ICVT’s expense ratio was cut to 0.20% from 0.35%.
“These enhancements seek to meet the evolving needs of fixed income investors. With today’s announcement, we are providing investors with additional fixed income exposures at competitive prices,” Tucker added.
For more information on new fund products, visit our new ETFs category.