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 XTF.com. 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 InvestorPlace.com[20]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @KyleWoodley[21].

Endnotes:
  1. IYLD: http://studio-5.financialcontent.com/investplace/quote?Symbol=IYLD
  2. BLK: http://studio-5.financialcontent.com/investplace/quote?Symbol=BLK
  3. since its disastrously failed IPO: http://investorplace.com/ipo-playbook/bats-wins-the-gold-for-ipo-disasters/
  4. iShares: http://us.ishares.com/product_info/fund/holdings/IYLD.htm
  5. HYG: http://studio-5.financialcontent.com/investplace/quote?Symbol=HYG
  6. TLT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TLT
  7. DVY: http://studio-5.financialcontent.com/investplace/quote?Symbol=DVY
  8. PFF: http://studio-5.financialcontent.com/investplace/quote?Symbol=PFF
  9. LQD: http://studio-5.financialcontent.com/investplace/quote?Symbol=LQD
  10. EMB: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMB
  11. TLH: http://studio-5.financialcontent.com/investplace/quote?Symbol=TLH
  12. REM: http://studio-5.financialcontent.com/investplace/quote?Symbol=REM
  13. IGF: http://studio-5.financialcontent.com/investplace/quote?Symbol=IGF
  14. GHYG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GHYG
  15. HYXU: http://studio-5.financialcontent.com/investplace/quote?Symbol=HYXU
  16. EMHY: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMHY
  17. IHY: http://studio-5.financialcontent.com/investplace/quote?Symbol=IHY
  18. also were bond-heavy: http://investorplace.com/2012/04/5-new-etfs-play-with-bonds-and-beans/
  19. Kyle Woodley: http://investorplace.com/author/kyle-woodley/
  20. InvestorPlace.com: http://investorplace.com/
  21. @KyleWoodley: https://twitter.com/#%21/kylewoodley

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