iShares Inflation Hedged Hgh Yld Bd ETF boasts strong Process and People Pillar ratings, but other weaknesses hold this strategy's Morningstar Medalist Rating at Neutral.  The strategy charges fees in line with its similarly distributed peers, priced within the middle quintile.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in corporate bonds and an underweight in AA rated bonds compared with category peers. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

iShares iBoxx High Yield Corporate Bond ETF

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. iShares Inflation Hedged Hgh Yld Bd ETF earns an Above Average Process Pillar rating.    The main contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The firm's five-year retention rate of 92% also contributes to the process. Lastly, the process is limited by its parent firm's risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.1 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

 Compared with other funds in the Inflation-Protected Bond Morningstar Category, this fund takes on significantly higher credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the category average, the managers have been significantly overweight corporate bonds in recent years. In the latest month, the strategy has relatively overweighted corporate bonds compared with its peers as well. Additionally, there's been a notable underallocation from AA rated bonds over the past few years. Similarly, in recent months, the strategy also had less exposure to AA rated bonds than peers. Finally, during the past few years, the fund leaned meaningfully away from debt with 15- to 20-year maturities. In recent months, the strategy also had less exposure to debt with 15- to 20-year maturities compared to its peers.

 This strategy's 12-month yield is 6.2%, higher than its average peer's 4.7%. Higher yields tend to indicate higher credit risk. The portfolio has a lower average surveyed credit quality of B, compared with the typical peers' A and its non-investment-grade stake is 99% of assets, compared to its peers' 1%. Lower quality bonds have higher yields but come with more risk.

Above Average

Process

iShares Inflation Hedged Hgh Yld Bd ETF's strong team drives the strategy's Above Average People Pillar rating. There are two managers listed on the fund: James Mauro, Karen Uyehara. The team is well equipped, with an average of 13 years of portfolio management experience. Together, they manage a total of 114 strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Inflation Hedged High Yield Bond ETF

HYGI tracks an index that holds the iShares iBoxx USD High Yield Corporate Bond ETF (HYG), which targets USD-denominated, high-yield corporate bonds, while mitigating inflation risk through swaps.

iShares Inflation Hedged US Aggregate Bond ETF

AGIH, the iShares Inflation Hedged U.S. Aggregate Bond ETF, has a goal of inflation-protecting the aggregate U.S. bond market. HYGI, the iShares Inflation Hedged High Yield Bond ETF, has a goal of inflation-protecting the high yield part of the U.S. bond market.

AGIH And HYGI: iShares Starts 2 Inflation-Hedged Bond ETFs

iShares Interest Rate Hedged US Aggregate Bond ETF

iShares has launched three new fixed income ETFs on the NYSE Arca today: the iShares Inflation Hedged High Yield Bond ETF (NYSE Arca: HYGI), the iShares Interest Rate Hedged U.S. Aggregate Bond ETF (NYSE Arca: AGRH), and the iShares Inflation Hedged U.S. Aggregate Bond ETF (NYSE Arca: AGIH). HYGI seeks to track the investment results [.

News for iShares Inflation Hedged High Yield Bond ETF ETF (HYGI)