iShares Fallen Angels USD Bond ETF (11ZN)
XBER 
Summary
11ZN Chart
FALN: Fallen Angels ETF Still Ahead Of Its Competitors
iShares Fallen Angels USD Bond ETF (FALN) offers exposure to junk bonds previously rated investment grade, aiming for superior risk-adjusted returns. The fund maintains high credit quality within junk bonds, with 78% in BB-rated securities and a diversified sector allocation. FALN has outperformed the high-yield benchmark HYG and a number of strategy-based high-yield bond ETFs since its inception.
FALN: Sorting The Best Of The Junk
iShares Fallen Angels USD Bond ETF (FALN) invests in junk bonds whose issuers previously had an investment grade rating. FALN has outperformed other junk bond ETFs and its closest competitor ANGL. However, FALN has lagged inflation in value and suffered a decay in distribution.
FALN ETF: As Smooth As High-Yield Gets
We believe the iShares Fallen Angels USD Bond ETF illustrates a good blend of credit risk and yield curve exposure, allowing a stable pricing environment. Furthermore, FALN ETF provides lucrative dividends, which could be sustained if our outlook on credit risk and the yield curve pans out. Although debatable, our models forecast an all-in return above 10%.
iShares Fallen Angels USD Bond ETF (11ZN) FAQ
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iShares Fallen Angels USD Bond ETF Profile
| XBER Exchange | US Country |
Overview
This fund focuses on investing in high yield corporate bonds that present a unique investment opportunity. Primarily, the investment strategy emphasizes allocating at least 80% of its assets towards the securities that comprise the underlying index. Moreover, a significant portion, which is at least 90% of its assets, is dedicated to investing in fixed income securities that align with the types included within the underlying index. The index, in particular, is crafted to mirror the performance of U.S. dollar-denominated, high yield corporate bonds that previously held investment grade ratings. This strategic investment approach aims to optimize returns for investors by capitalizing on the potential upsides of these high yield bonds while managing the associated risks.
Products and Services
- High Yield Corporate Bond Investments
This service involves the strategic acquisition of high yield corporate bonds that were once considered investment grade. The primary goal is to offer investors the opportunity to participate in the potential high returns of these bonds, which entail a higher risk compared to traditional investment grade bonds. The focus is on U.S. dollar-denominated assets, aiming to provide a diversified portfolio that minimizes currency risk for investors.
- Fixed Income Security Investments
Emphasizing on fixed income securities, this investment option is designed for investors seeking regular income streams with a relatively lower level of risk. By investing at least 90% of its assets in fixed income securities of the types included in the underlying index, the fund aims to deliver stable returns. These securities are selected based on their potential to replicate the performance of the high yield corporate bonds market, while also offering a more secure investment alternative to equity investments.
