iShares High‑Yield Corporate Bond

ETF description

This ETF invests in ‘“fallen angels,”’ which are corporate bonds that were originally issued with an investment‑grade rating but have since been downgraded to high‑yield status. These bonds typically offer higher interest payments than investment‑grade bonds to compensate for the increased risk associated with lower credit ratings. The fund provides exposure to a range of companies across various sectors that have issued these downgraded bonds, offering the potential for higher income.

This ETF may appeal to investors looking for higher income potential through bonds but who are comfortable with the added risk that comes with investing in high‑yield securities. It could suit those interested in diversifying their fixed‑income portfolio with bonds that offer higher returns than typical investment‑grade options.

Issuer details

iShares ETFs are issued and managed by BlackRock, the world’s largest asset management company.

With 800+ products globally and over $2trn in assets (as at June 2024), iShares ETFs are a flexible, low‑cost way for investors to gain exposure to various market segments, including fixed income, emerging markets and broad‑based indexes.

Index details

The High‑Yield Corporate Bond index offers investors exposure to corporate bonds with lower credit ratings, reflecting the performance of high‑risk, high‑return securities. By focusing on bonds that typically offer higher yields, the index provides opportunities for enhanced income generation, albeit with increased credit risk.