Market Overview

iShares Expands High-Yield Bond ETF Lineup


BlackRock Inc. (NYSE: BLK)'s iShares unit, the world's largest issuer of exchange traded funds, added to its already sizable lineup of fixed income ETFs Thursday with the debut of two focused high-yield corporate bond funds.

iShares introduced its take on fallen angel bonds with the iShares Fallen Angels USD Bond ETF (NASDAQ: FALN). Fallen angel bonds are corporate bonds that came to market as investment-grade issues, but were later downgraded to junk status.

That particular segment of the high-yield corporate bond market has been soaring this year because many of the newest fallen angels hail from the energy patch and after being battered amid 2015's plunging oil prices, rebounding energy prices are lifting fallen angels in 2016.

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FALN faces intense competition from the VanEck Vectors Fallen Angel High Yield Bond ETF (NYSE: ANGL). ANGL is the first ETF dedicated to fallen angel bonds and one of this year's fastest-growing bond ETFs.

The other new addition from iShares is the iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF (NASDAQ: HYXE). As its name implies, the iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF excludes debt issued by oil and gas firms.

iShares also said it lowered the expense ratio on the iShares 0-5 Year Investment Grade Corporate Bond ETF (NASDAQ: SLQD) to 0.08 percent per year from 0.15 percent. The issuer also pared the annual fee on the iShares Convertible Bond ETF (BATS: ICVT) to 0.2 percent from 0.35 percent.

iShares bond ETFs have garnered $20 billion in new assets this year, or half of the total amount of new capital that has flowed into all bond ETFs year-to-date.


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Posted-In: Long Ideas News Bonds Specialty ETFs New ETFs Markets Trading Ideas ETFs

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