iShares $ High Yield Corp Bond ESG UCITS ETF GBP Hedged (Dist)
| Issuer: iShares |
| Asset Class: Fixed Income |
| TER: 27bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 13 Sep 2021 |
| Ticker: DHYG |
| ISIN: IE0003NVF3Y3 |
This fund offers a targeted fixed-income strategy for investors seeking exposure to the U.S. high-yield corporate bond market with a strong emphasis on sustainability. It focuses on shorter-maturity bonds, specifically those with a 1-5 year term, which can help reduce sensitivity to interest rate fluctuations compared to longer-duration debt. The portfolio is composed of sub-investment grade corporate bonds, offering the potential for higher income streams characteristic of the high-yield segment, while concentrating on the upper-tier of this credit spectrum (BB-B rated securities) to manage default risk.
At its core, the fund employs a rigorous screening methodology based on socially responsible investing (SRI) principles. This involves excluding companies with significant business activities in controversial sectors such as tobacco, controversial and nuclear weapons, civilian firearms, and certain fossil fuels like thermal coal and oil sands. Furthermore, the selection process incorporates environmental, social, and governance (ESG) ratings, ensuring that the underlying issuers meet specific performance standards in these areas. This dual-layered screening process aims to align the investment with the values of ethically-minded investors while still providing access to the income potential of the high-yield credit market.
This investment could serve as a strategic component for those looking to enhance the income profile of their portfolio while adhering to sustainable principles. It provides a distinct risk-return profile compared to both investment-grade bonds and equities. For certain investors, the availability of currency-hedged share classes is a key feature, designed to mitigate the impact of foreign exchange volatility between the underlying assets and their local currency, thereby isolating the investment's performance to the bond market itself.
