BlackRock (NYSE: BLK), begun trading 2 new High Yield ETFs, the iShares Fallen Angels USD Bond ETF (Nasdaq: FALN) and the iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF (Nasdaq: HYXE) on Thursday, June 16, 2016. Here is a synopsis of the new ETFs:

 

1.
FUND INFORMATION:

Symbol: FALN	Exchange: NASDAQ
Name: iShares Fallen Angels USD Bond ETF	Net Expense Ratio: 0.35%

 

FUND OBJECTIVE:
The iShares Fallen Angels USD Bond ETF seeks to track the investment results of the Barclays US High Yield Fallen Angel 3% Capped Index.

REFERENCE INDEX:
The Barclays US High Yield Fallen Angel 3% Capped Index is designed to reflect the performance of U.S. dollar denominated, high yield corporate bonds that were previously rated investment grade. Bonds are market value weighted with a 3% cap on each issuer. The bonds eligible for inclusion in the Underlying Index are U.S. dollardenominated corporate bonds that:
(i) are issued by companies domiciled in countries classified as developed markets by the index provider (based primarily on World Bank income classifications);
(ii) have an average rating of below-investment grade (as determined by the Index Provider);
(iii) previously had an average rating of investment grade; (iv) have at least $150 million of outstanding face value;
(v) have a fixed-rate coupon; and
(vi) have at least one year to maturity.

In determining whether a bond has an average rating of investment grade or below-investment grade, ratings from Moody’s Investors Services, Standard & Poor’s Ratings Services and Fitch Ratings, Inc. are considered. Securities in the Underlying Index must be rated below-investment grade (lower than “BBB-” by Standard & Poor’s Ratings Services and Fitch, or “Baa3” by Moody’s) using the middle rating of Moody’s, Standard and Poor’s Ratings Services, or Fitch after dropping the highest and lowest available ratings. When a rating from only two agencies is available, the lower (“more conservative”) rating is used. When a rating from only one agency is available, that rating is used to determine eligibility in the Underlying Index. If an issue is unrated, the Index Provider may consider expected ratings and/or issuer-level ratings adopted by a ratings agency. There is no limit to the number of issues in the Underlying Index, but as of May 31, 2016, the Underlying Index included approximately 373 constituents. The Underlying Index may include large-, mid- or small capitalization companies, and components primarily include financials, industrials, and utilities companies. The components of the Underlying Index, and the degree to which these components represent certain industries, may change over time.

 

Top 10 Issuers (06/17/16):

Teck Resources Ltd	3.27%
Continental Resources Inc.	3.00%
Telecom Italia Capital SA	2.98%
Arcelormittal	2.98%
Freeport-McMoran Inc.	2.97%
Alcoa Inc.	2.91%
Transocean Inc.	2.83%
Sprint Capital Corporation	2.82%
Navient Corp.	2.80%
CenturyLink Inc.	2.74%

 

 

Useful Links:
FALN Home Page

 

 

 

2.
FUND INFORMATION:

Symbol: HYXE	Exchange: NASDAQ
Name: iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF	Net Expense Ratio: 0.50%

 

FUND OBJECTIVE:
The iShares iBoxx $ High Yield ex Oil & Gas Corporate Bond ETF seeks to track the investment results of the Markit iBoxx USD Liquid High Yield ex-Oil and Gas Index.

 

REFERENCE INDEX:
The Markit iBoxx USD Liquid High Yield ex-Oil and Gas Index is designed to reflect the performance of U.S. dollar-denominated, high yield corporate bonds, excluding those issued by companies in the Oil and Gas sector, as determined by the index provider. As used in this Prospectus, the term “Oil and Gas” includes both producers of oil and gas products and suppliers of equipment and services related to the oil and gas industry.

The Underlying Index is a modified market-value weighted index with a cap on each issuer of 3%. The bonds eligible for inclusion in the Underlying Index are U.S. dollar-denominated corporate bonds that:
(i) are issued by companies domiciled in countries classified as developed markets by the index provider based primarily on quantitative economic criteria established by the index provider;
(ii) have an average rating of below-investment grade (as determined by the Index Provider);
(iii) are from issuers with at least $1 billion outstanding face value;
(iv) have an original maturity date of less than 15 years;
(v) have at least one year to maturity; and
(vi) are not issued by companies whose primary activities are in the oil and gas sector, as determined by the index provider.

In determining whether a bond has an average rating of below-investment grade, ratings from Moody’s Investors Services, Standard & Poor’s Ratings Services and Fitch Ratings, Inc. are considered. Securities in the Underlying Index must be rated below-investment grade (lower than “BBB-” by Standard & Poor’s Ratings Services and Fitch, or “Baa3” by Moody’s) using the middle rating of Moody’s, Standard and Poor’s Ratings Services, or Fitch after dropping the highest and lowest available ratings. When a rating from only two agencies is available, the lower (“more conservative”) rating is used. When a rating from only one agency is available, that rating is used to determine eligibility in the Underlying Index. If a particular tranche is unrated but its parent is rated, the parent’s rating is adopted. There is no limit to the number of issues in the Underlying Index, but as of May 31, 2016, the Underlying Index included approximately 859 constituents. The Underlying Index may include large-, mid-, or small capitalization companies. Components of the Underlying Index primarily include consumer services, industrials, and telecommunications companies. The components of the Underlying Index, and the degree to which these components represent certain industries, may change over time.

Top 10 Issuers:

HCA INC	3.31%
T-MOBILE USA INC	3.18%
ARDAGH PACKAGING FINANCE PLC/ARDAGH HOLDINGS USA INC	2.99%
UNITYMEDIA GMBH	2.10%
ALLY FINANCIAL INC	2.09%
NXP BV/NXP FUNDING LLC	2.03%
ALTICE FINANCING SA	2.00%
NUMERICABLE SFR SA	1.98%
INTERNATIONAL LEASE FINANCE CORPORATION	1.95%
CCO HOLDINGS LLC/CCO HOLDINGS CAPITAL CORP	1.82%

 

 

Useful Links:
HYXE Home Page