BlackRock’s iShares Exchange Traded Funds (ETFs) business, has launched two new funds with two more scheduled to launch on 5 April.
The new funds include three “first to market” products designed to offer exposure to high yield securities across the global developed and emerging markets. The fourth new fund is an “ETF of iShares ETFs” that seeks to provide single-trade access to a diversified set of income sources.
“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,” says Darek Wojnar (pictured), Head of US iShares Product Development and Management at BlackRock. “In many cases, they need ready access to a broader range of global solutions for yield and income.
“The new funds represent just the latest illustration of our dedication to helping investors successfully navigate today’s highly challenging yield and income landscape,” he says.
Offered on the BATS Exchanges, the four new funds are –
First Day of Trading on April 3: iShares Emerging Markets High Yield Bond Fund (EMHY); and iShares Global ex USD High Yield Corporate Bond Fund (HYXU)
First Day of Trading scheduled on or around April 5: iShares Global High Yield Corporate Bond Fund (GHYG); and iShares Morningstar Multi-Asset Income Index Fund (IYLD).
iShares Emerging Markets High Yield Bond Fund (EMHY), a first to market product, provides access to high yield bonds denominated in USD and includes a 65% allocation to sovereign bonds and 35% to corporate issues. The new fund is designed to track the Morningstar Emerging Markets High Yield Bond Index, a broad investable universe.
iShares Global ex USD High Yield Corporate Bond Fund (HYXU), a first to market product, offers access to developed international non-US denominated high yield bonds, which are denominated in euros, pound sterling and Canadian dollars. The fund’s highest country allocations are France (15 per cent), the United Kingdom (15 per cent), Germany (14 per cent), and the Netherlands (12 per cent). The fund is designed to track the Markit iBoxx Global Developed Markets ex-US High Yield Index.
iShares Global High Yield Corporate Bond Fund (GHYG), a first to market product, provides complete global (US and developed international) high yield in a “one ticket” 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 per cent to the US, 16 per cent to Europe, 4 per cent to the United Kingdom, and 3 per cent to Canada. The fund is designed to track the Markit iBoxx Global Developed Markets High Yield Index.
“As investors have broadened their search for new income sources globally, high yield has emerged as one of the market’s more significant opportunities,” says Wojnar. “At the same time, high yield is an asset class where investors can particularly benefit from well diversified approach.
“Our three new high yield funds – in combination with our existing iShares iBoxx $ High Yield Corporate Bond Fund – represent a complete global, high yield tool kit, flexible enough to serve the widest possible range of investor needs and interests across this asset class,” he says. “This tool kit is literally a ‘one-stop’ global solution for investors interested in high yield.”
The fourth new fund, iShares Morningstar Multi-Asset Income Index Fund (IYLD), is an ETF of iShares ETFs that delivers income with a diversified, managed approach. The fund is allocated 60 per cent to fixed income, 20 per cent to equity and 20 per cent to alternative income sources. The new fund is designed to track the Morningstar Multi-Asset High Income Index.
Wojnar said, “Investors are increasingly looking for diversification in income streams and asset classes. The new iShares Morningstar Multi-Asset Income Index Fund can help investors mitigate key risks in any one particular asset class.”