Blackrock, manager of the iShares ETFs has unveiled four new funds focused on bonds and income strategies.
The new ETFs target high yield securities across global developed and emerging markets along with a multi-asset class fund of funds ETF. The funds are listed on the BATS exchange.
Here's a snapshot of the new iShares ETFs:
Focuses on 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. EMHY charges annual expenses of 0.65%.
Owns 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 fund is designed to track the Markit iBoxx Global Developed Markets ex-US High Yield Index. HYXU charges annual expenses of 0.40%.
Owns global (U.S. 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 percent to the U.S., 16 percent to Europe, 4 percent to the United Kingdom, and 3 percent to Canada. The fund is linked to the Markit iBoxx Global Developed Markets High Yield Index. GHYG charges annual expenses of 0.40%.
IYLD is an ETF of iShares ETFs that is allocated 60 percent to fixed income, 20 percent to equity and 20 percent to alternative income sources. The new fund is designed to track the Morningstar Multi-Asset High Income Index. IYLD charges annual expenses of 0.60%.
Other ETF Launches
"Our research has shown that for many investors the current allocation to corporate high-yield debt may miss as much as 35% of the global high-yield market," said Edward Lopez, Market Vectors' Marketing Director. "That underexposure may be especially important as international corporate high-yield onds currently offer higher yields as well as historically lower default rates than similar debt instruments in the U.S."
IHY is comprised of below investment-grade debt issued by corporations located throughout the world and may include emerging market countries. The fund excludes United States denominated debt in Euros, U.S. dollars, Canadian dollars or pound sterling issued in the major domestic or Eurobond markets. IHY is linked to the BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index.
The fund charges net annual expenses of 0.40%.
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