Income, Junk in the New ETFs Trunk

by Kyle Woodley | April 9, 2012 12:18 pm

Five new exchange-traded funds greeted the market in April’s first week, and income once again was the flavor du semaine. Four bond funds came into being, as well as a “fund of funds.”

The Morningstar Multi-Asset Income Index Fund (BZX:IYLD[1]) was one of four funds that BlackRock (NYSE:BLK[2]) brought to market last week on the BATS BZX Exchange, the first listings for the exchange since its disastrously failed IPO[3].

But rather than holding any particular set of stocks, IYLD holds a number of ETFs across several classes. Fixed-income ETFs make up about 60% of the fund, equity 20% and alternative asset classes (REITs and preferred securities) 20%.

IYLD’s most recent holdings list, according to iShares[4]:

IYLD’s net expense ratio is 0.6% — that includes 0.25% in management fees, as well as expenses for the ETFs it holds.

BlackRock also launched a few bond funds, including …

Global High Yield Corporate Bond Fund (BZX:GHYG[14]): Tracks an index for high-yield bonds in developed markets, denominated in several currencies including U.S. dollars. U.S. bonds account for 69% of the fund. Expenses are 0.4%.

iShares Global ex-USD High Yield Corporate Bond Fund (BZX:HYXU[15]): Like GHYG, except bonds are denominated in non-U.S. currencies. France, the U.K., Germany and the Netherlands are the best-represented. Expenses are 0.4%.

iShares Emerging Markets High Yield Bond Fund (BZX:EMHY[16]): Tracks an index for high-yield corporate and government bonds denominated in U.S. dollars. Expenses are 0.65%.

Van Eck also launched the Market Vectors International High Yield Bond ETF (NYSE:IHY[17]), which tracks an index for high-yield bonds of international corporations outside the U.S. that are not denominated in U.S. dollars, Canadian dollars, euros or pounds. Despite dealing in noninvestment-grade bonds, most of IHY’s bonds are on the better end of the rating spectrum. Expenses are 0.4%.

All in all, 90 new funds have been launched this year, according to The previous week’s offerings also were bond-heavy[18], though a commodity ETF also came to market.

Kyle Woodley[19] is the assistant editor of[20]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[21].

  1. IYLD:
  2. BLK:
  3. since its disastrously failed IPO:
  4. iShares:
  5. HYG:
  6. TLT:
  7. DVY:
  8. PFF:
  9. LQD:
  10. EMB:
  11. TLH:
  12. REM:
  13. IGF:
  14. GHYG:
  15. HYXU:
  16. EMHY:
  17. IHY:
  18. also were bond-heavy:
  19. Kyle Woodley:
  21. @KyleWoodley:

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