The investment management giant has added to its UCITS fixed income offering with an exchange-traded fund investing in high-yield corporate bonds worldwide.

BlackRock has launched an exchange-traded fund offering investors exposure to bonds that have been downgraded from investment grade to high yield, otherwise known as “fallen angel” bonds. 

The iShares Fallen Angels High Yield Corporate Bond UCITS ETF (WING) is aimed at investors seeking to take advantage of the price anomaly that can arise following a downgrade of these securities. The fund's underlying index has exposure to over 450 holdings, with exposure of each issuer capped at 3 per cent of the total market value. 

The index is rebalanced monthly and emerging market issuers and bonds rated below B- are excluded as part of the screening process. The fund, which has a total expense ratio of 0.50 per cent, is physically replicating, meaning it buys the securities of the index.

“Bond ETFs have had a record start to the year, with year-to-date net global flows at over $60 billion. We are seeing investors using ETFs to access assets across the fixed income spectrum as they seek to diversify their portfolios against a challenging low yield backdrop, and do so at a lower cost,” said Brett Olson, BlackRock's head of iShares fixed income for Europe, the Middle East and Africa.

“Our clients tell us that they want more innovative fixed income products as they seek to boost the potential for yield in outperformance. We are responding to this demand, with this fund taking the number of European-domiciled iShares fixed income ETFs to 89.”

At the end of March 2016, BlackRock’s assets under management totalled $4.737 trillion, of which the firm's ETF provider, iShares, managed more than $1 trillion.