iShares has launched an exchange-traded fund (ETF) that provides exposure to bonds downgraded from investment grade to high yield, often referred to as “fallen angels”.
The iShares Fallen Angels High Yield Corporate Bond Ucits ETF follows an underlying index of over 450 holdings.
This underlying index is rebalanced months, and will exclude emerging market issuers and will invest in the upper spectrum of high yield, with no exposure to bonds rated below B-.
It will physically replicate the index and have a total expense ratio of 0.5 per cent. The ETF becomes iShares’ 89th fixed income product.
Brett Olson, head of iShares fixed income for Emea, said: “Bond ETFs have had a record start to the year, with year-to-date net global flows at over $60bn (£45bn). We are seeing investors using ETFs to access assets across the fixed income spectrum as they seek to diversify their portfolios against a challenging low yield backdrop, and do so at a lower cost.”
