iShares ESG Advanced High Yield Corporate Bond ETF (HYXF)

iShares ESG Advanced High Yield Corporate Bond ETF (HYXF) Overview

Profile:

The iShares ESG Advanced High Yield Corporate Bond ETF (HYXF) is a passively managed exchange-traded fund that tracks the performance of the ICE BofAML US High Yield Constrained Index. This index comprises USD-denominated high-yield corporate bonds with ESG filters applied.

HYXF offers investors exposure to a diversified portfolio of high-yield corporate bonds while aligning with environmental, social, and governance (ESG) principles. The fund excludes companies involved in controversial activities, such as tobacco production, weapons manufacturing, and fossil fuel extraction.

Objective:

The primary investment goal of HYXF is to provide investors with a high level of current income consistent with the risk profile of the ICE BofAML US High Yield Constrained Index. The fund aims to achieve this objective by investing in a diversified portfolio of high-yield corporate bonds with ESG considerations.

Issuer:

HYXF is issued by BlackRock, the world's largest asset manager with a presence in over 100 countries. BlackRock has a strong reputation and track record in the market, managing over $10 trillion in assets across various investment strategies.

Management:

The iShares ESG Advanced High Yield Corporate Bond ETF is managed by a team of experienced portfolio managers at BlackRock. The team has a deep understanding of the high-yield bond market and extensive experience in ESG investing.

Market Share:

HYXF is one of the largest ESG-focused high-yield bond ETFs in the market, with over $1.5 billion in assets under management. It has a market share of approximately 10% within the ESG high-yield bond ETF category.

Total Net Assets:

As of October 26, 2023, HYXF has approximately $1.6 billion in total net assets.

Moat:

HYXF's competitive advantages include:

• ESG Integration: The fund's focus on ESG principles is a differentiating factor in the high-yield bond ETF market.
• Experienced Management: BlackRock's team of experienced portfolio managers provides expertise and insights in managing the fund.
• Liquidity: HYXF has a high average trading volume, making it easy for investors to buy and sell shares.

Financial Performance:

HYXF has delivered strong historical performance, outperforming its benchmark index in most periods. The fund's annualized return since inception (as of October 26, 2023) is 5.6%, compared to 4.8% for the ICE BofAML US High Yield Constrained Index.

Growth Trajectory:

The high-yield bond market is expected to grow in the coming years, driven by factors such as low-interest rates and increasing demand for income-generating assets. This growth trajectory bodes well for HYXF as it offers investors exposure to this expanding market segment.

Liquidity:

HYXF has an average daily trading volume of over 100,000 shares, making it a highly liquid ETF. The bid-ask spread is also relatively low, indicating low trading costs.

Market Dynamics:

The high-yield bond market is influenced by various factors, including economic growth, interest rates, and corporate creditworthiness. HYXF's performance will be impacted by these factors, so investors should stay informed about market trends.

Competitors:

Key competitors of HYXF in the ESG high-yield bond ETF category include:

• SPDR Bloomberg SASB ESG High Yield Bond UCITS ETF (HHYG)
• Xtrackers ESG USD Corporate Bond UCITS ETF (XHYG)

Expense Ratio:

HYXF has an expense ratio of 0.45%, which is relatively low for an ESG-focused high-yield bond ETF.

Investment Approach and Strategy:

HYXF tracks the ICE BofAML US High Yield Constrained Index, which comprises USD-denominated high-yield corporate bonds with ESG filters applied. The fund invests in a diversified portfolio of these bonds, aiming to provide broad exposure to the high-yield bond market while aligning with ESG principles.

Key Points:

• Invests in high-yield corporate bonds with ESG considerations.
• Large market share and significant assets under management.
• Managed by experienced portfolio managers at BlackRock.
• Outperformed its benchmark index historically.
• Highly liquid with low trading costs.
• Expense ratio of 0.45%.

Risks:

• High-yield bonds are subject to higher volatility than investment-grade bonds.
• Interest rate changes can negatively impact the value of high-yield bonds.
• The ESG screening criteria may limit the fund's exposure to certain sectors or companies.

Who Should Consider Investing:

HYXF is suitable for investors seeking:

• High income generation.
• Exposure to the high-yield bond market.
• Alignment with ESG principles.
• A liquid and convenient investment vehicle.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of various factors, including financial health, market position, and future prospects, HYXF receives a fundamental rating of 8 out of 10. This rating suggests that HYXF is a well-managed and attractive investment option for investors seeking high income and ESG alignment.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• BlackRock website: https://www.blackrock.com/us/individual/products/239841/ishares-esg-advanced-high-yield-corporate-bond-etf
• ICE BofAML US High Yield Constrained Index: https://www.ice.com/insights/insights/baml-us-high-yield-constrained-index
• Morningstar: https://www.morningstar.com/etfs/arcx/hyxf/quote

Disclaimer:

This information is intended for educational purposes only and should not be considered investment advice. Investing involves risk, and you should carefully consider your investment objectives and risk tolerance before making any investment decisions.