ETF Watch: iShares Launches Bond Funds

New ETFs target junk bonds in unique niches.
Reviewed by: Staff
Edited by: Staff

A day after the iShares rolled out its first China A-shares ETF, BlackRock’s ETF arm is following up with the launch of two fixed income funds. The iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF (HYXE) and the iShares Fallen Angels USD Bond ETF (FALN) launched on the Nasdaq stock market with expense ratios of 0.50% and 0.35%, respectively.

HYXE tracks the Markit iBoxx USD Liquid High Yield ex-Oil and Gas Index, which covers below-investment-grade securities issued by companies in developed markets that have at least one year remaining to their maturities, but never had a maturity period of longer than 15 years. Eligible securities must also be issued by firms with at least $1 billion in outstanding value and be issued by companies operating in the oil and gas industry. The index had 859 components as of the end of May.  

FALN tracks the Barclays US High Yield Fallen Angel 3% Capped Index, which covers developed-market securities that have been downgraded from investment-grade to below-investment-grade status. Potential components must also have $150 million in outstanding value and at least one year to maturity.

Direxion Adds High Yield Bear Fund

Today Direxion rolled out an ETF offering -200% of the daily performance of its underlying index, the Barclays U.S. High Yield Very Liquid Index. The Direxion Daily High Yield Bear 2X Shares (HYDD) launched on the NYSE Arca and comes with an expense ratio of 0.82%.

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