iShares Euro Corporate Bon BBB-BB UCITS ETF, as the name suggests, will target both non- and investment-grade euro-denominated corporate bonds rated BBB and BB.
The iShares US Equity Buyback Achievers UCITS ETF will target NASDAQ and NYSE firms that employ a share buy-back scheme. The fund’s underlying index will only consider firms that have repurchased a minimum 5% of their shares in the year previous.
Both funds became available to UK investors through the London Stock Exchange in sterling on 4 February. The US ETF has the US dollar as the base currency, while its European counterpart the euro, and carry total expense ratios of 0.55% and 0.25% respectively.
Tom Fekete, head of product development for iShares in EMEA, said: “The launch of the euro corporate bond fund is the first time investors will be able to access Euro denominated investment grade and sub-investment grade corporate bonds through an ETF.
“When an investment-grade bond is downgraded to high-yield or is upgraded from high-yield to investment-grade, it typically leads to large price movements and trading volumes. At that moment there are attractive risk-return opportunities and our fund is designed to capitalise on this.
He continued: “Many investors look favourably at companies that improve shareholder returns by buying back their shares, and we expect a continuation of buy-back activity by US firms in 2015 as the cost of financing remains low. Our fund provides a new way of targeting these companies, and is designed to give investors access to those firms that execute buybacks at times when their share prices are attractive.”
