iShares € High Yield Corp Bond UCITS ETF EUR (Acc)
| Issuer: iShares |
| Asset Class: Fixed Income |
| TER: 50bps |
| Trading Currency: EUR |
| Pays Income: False |
| Listing Date: 25 Sep 2017 |
| Ticker: HIGH |
| ISIN: IE00BF3N7094 |
This investment fund offers targeted exposure to the European high-yield corporate bond market. It is designed to track the performance of an index composed of euro-denominated, sub-investment grade corporate bonds. These bonds, often referred to as 'junk bonds', are issued by companies with lower credit ratings. To compensate investors for the increased credit risk, these securities typically offer higher interest payments, or yields, compared to their investment-grade counterparts. The portfolio is diversified across various issuers and sectors, aiming to capture the broad characteristics of this specific segment of the fixed income market.
Investing in high-yield bonds can be an attractive strategy for those seeking to enhance the income-generating potential of their portfolio, particularly in lower interest rate environments. The higher coupons can provide a significant yield pick-up over safer government or investment-grade corporate debt. However, this potential for higher returns comes with elevated risk. High-yield bonds are more sensitive to economic cycles and company-specific news, leading to greater price volatility and a higher probability of default than higher-rated bonds. As such, this fund may be suitable for investors with a higher risk tolerance and a medium- to long-term investment horizon.
This specific share class operates on an accumulating basis, meaning that any interest income generated by the underlying bonds is automatically reinvested back into the fund rather than being paid out to shareholders. This process facilitates the compounding of returns over time, making it a suitable option for investors focused on capital growth. The fund uses a physical replication method, holding the actual bonds that constitute the index. It also incorporates specific environmental, social, and governance (ESG) screening criteria, excluding companies involved in controversial business activities like thermal coal and oil sands.
