iShares Fallen Angels High Yield Corp Bond UCITS ETF GBP Hedged (Dist)

Issuer: iShares

Asset Class: Fixed Income

TER: 55bps

Trading Currency: GBP

Pays Income: False

Listing Date: 12 Apr 2018

Ticker: WIGG

ISIN: IE00BDFK1680

This investment vehicle offers targeted exposure to the 'fallen angels' segment of the global high-yield corporate bond market. Fallen angels are bonds that were originally issued with an investment-grade credit rating but have since been downgraded to sub-investment grade, or 'junk', status. The core investment thesis is that the market often overreacts to these downgrades, causing forced selling by institutional investors who are mandated to hold only investment-grade debt. This can create a temporary price dislocation, allowing investors to acquire these bonds at potentially discounted prices.

The strategy aims to capitalize on the potential for recovery. Companies whose debt is downgraded are often highly motivated to implement strategic changes—such as asset sales, cost-cutting, or operational restructuring—to improve their creditworthiness and regain an investment-grade rating. If successful, this can lead to significant price appreciation for their bonds. By investing in a diversified basket of these securities, the fund seeks to capture this potential upside while mitigating single-issuer risk. The portfolio provides global exposure, excluding financial sector companies, and is hedged back to Pound Sterling, which removes the impact of currency fluctuations for UK-based investors.