USHY Profile
The iShares Broad USD High Yield Corporate Bond ETF is designed to offer investors exposure to a diversified portfolio of U.S. dollar-denominated high-yield corporate bonds. The fund commits to investing at least 80% of its assets in the component securities of its underlying index, ensuring that it closely tracks the performance of this market segment. Additionally, the fund allocates at least 90% of its assets to fixed-income securities that align with the types included in the underlying index, which provides a broad representation of the high-yield corporate bond market in the United States. This strategy seeks to balance the pursuit of higher yields with the risks associated with lower-rated corporate debt.
The underlying index of the fund is meticulously designed to capture the broad spectrum of the U.S. high-yield corporate bond market, encompassing a wide array of issuers and industries. By focusing on U.S. dollar-denominated bonds, the fund mitigates currency risk, allowing investors to concentrate on credit risk and yield opportunities within the high-yield space. The index includes bonds from various sectors, ensuring that the fund’s holdings are not overly concentrated in any single industry, which helps in spreading risk across different economic sectors.
Investors in the iShares Broad USD High Yield Corporate Bond ETF can expect to gain access to bonds issued by companies that are below investment grade, often referred to as "junk bonds." These bonds typically offer higher yields than investment-grade bonds to compensate for the increased risk of default. The fund's broad exposure to the high-yield market provides investors with the potential for attractive income streams, although these come with the trade-off of higher credit risk. The ETF is suitable for those looking to enhance their fixed-income portfolios with higher-yielding securities, while still benefiting from the diversification offered by a broad-based index.
Managed by BlackRock Fund Advisors (BFA), the iShares Broad USD High Yield Corporate Bond ETF benefits from the expertise of one of the world’s leading asset management firms. BFA employs a rigorous investment process to ensure that the fund tracks its underlying index closely while managing risk. As a non-diversified fund, it may invest a significant portion of its assets in a smaller number of issuers, which could increase volatility. However, the fund’s broad exposure within the high-yield bond market helps to mitigate this risk, making it an effective vehicle for investors seeking higher income potential through strategic exposure to U.S. high-yield corporate debt.
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