iShares Interest Rate Hedged High Yield Bond ETF gives details

By Toni Weeks

San Luis Obispo, Calif., Feb. 6 - iShares gave details on its new iShares Interest Rate Hedged High Yield Bond ETF (NYSE: HYGH), according to an N-1A filing with the Securities and Exchange Commission.

The fund will seek to mitigate the interest rate risk of a portfolio composed of dollar-denominated, high-yield corporate bonds. Under normal circumstances, it will invest at least 80% of its net assets in its portfolio, in one or more underlying funds that principally invest in high-yield bonds and in U.S. Treasury securities.

According to the filing, at inception the fund intends to initially invest a substantial portion of its assets in one underlying fund, the iShares iBoxx High Yield Corporate Bond ETF, which invests in dollar-denominated high-yield bonds issued by companies domiciled in countries classified as developed markets.

The fund will attempt to mitigate the interest rate risk of the underlying securities primarily through the use of U.S. Treasury futures contracts or other interest rate futures contracts, including Eurodollar and Federal Funds futures.

James Mauro and Scott Radell are the portfolio managers.

Total annual fund operating expenses are expected to be 0.65%, which is comprised solely of a 0.65% management fee.

San Francisco-based BlackRock Fund Advisors is the investment adviser.

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