ETF Filing: iShares Plans Buyback & Bond Funds

August 04, 2017

Two recent and very different filings from iShares outline the issuer’s plans to launch funds covering some unique spaces.

Shareholder Payout Fund

The iShares U.S. Dividend and Buyback ETF tracks a Morningstar index of companies that return capital to their shareholders, whether it be through dividend payments or share buybacks. The methodology selects the equities of companies with the largest dividend and buyback programs based purely on dollar value in the targeted universe, the Morningstar US Market Index, the prospectus said.

Ultimately, the methodology selects the companies that represent the top 90% of payout dollars returned to investors. Individual components are weighted by total shareholder payout dollars and capped at a weighting of 4.9%, according to the document.

High Yield With A Twist
The iShares Broad USD High Yield Corporate Bond ETF will track the BofA Merrill Lynch U.S. High Yield Constrained Index, which covers high-yield corporate debt denominated in U.S. dollars. As of the end of June, the index included 1,888 companies, which are weighted by market value, with a 2% cap on each issuer, the prospectus said.

Constituents must have risk exposure to G-10 member countries, a list that covers the U.S., Japan, the United Kingdom, Canada, Australia, New Zealand, Switzerland, Norway, Sweden and the eurozone countries.

The components must also have at least $250 million in outstanding face value, an original maturity date of 18 months or more, and a year or more to maturity, among other requirements, the document noted.

Neither filing included a ticker, expense ratio or listing exchange.

Contact Heather Bell at [email protected]


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